#1BANK OF GEORGIA BANK OF GEORGIA GROUP PLC Investor Presentation 4Q18 & FY18 Financial Results 19 February 2019 www.bankofgeorgiagroup.com#2DISCLAIMER - FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements, including, but not limited to, statements concerning expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, competitive strengths and weaknesses, plans or goals relating to financial position and future operations and development. Although Bank of Georgia Group PLC believes that the expectations and opinions reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations and opinions will prove to have been correct. By their nature, these forward-looking statements are subject to a number of known and unknown risks, uncertainties and contingencies, and actual results and events could differ materially from those currently being anticipated as reflected in such statements. Important factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements, certain of which are beyond our control, include, among other things: currency fluctuations, including depreciation of the Georgian Lari, and macroeconomic risk; regional tensions and instability; loan portfolio quality; regulatory risk; liquidity risk; operational risk, cyber security, information systems and financial crime risk; and other key factors that indicated could adversely affect our business and financial performance, which are contained elsewhere in this document and in our past and future filings and reports of the Group, including the 'Principal Risks and Uncertainties' included in Bank of Georgia Group PLC 2Q18 and 1H18 results announcement and in BGEO Group PLC's Annual Report and Accounts 2017. No part of this presentation constitutes, or shall be taken to constitute, an invitation or inducement to invest in Bank of Georgia Group PLC or any other entity within the Group, and must not be relied upon in any way in connection with any investment decision. Bank of Georgia Group PLC and other entities within the Group undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required. Nothing in this presentation should be construed as a profit forecast. BANK OF GEORGIA 2#3CONTENT Group Overview Results Discussion • Georgian Macro Overview • Appendices BANK OF GEORGIA 4 10 35 56 3#4BANK OF GEORGIA GROUP OVERVIEW Banking Business BANK OF GEORGIA GROUP PLC Top shareholders As of 31 December 2018 Retail Banking Corporate Investment Banking Rank Shareholder name Ownership 1 JSC Georgia Capital* 19.90% 2 Harding Loevner LP 4.66% 3 JP Morgan Asset Management 3.01% Wealth Management BNB (Bank in Belarus) Norges Bank Investment Management 2.56% 5 Van Eck Global 2.51% Dimensional Fund Advisors (DFA) 2.51% 7 LGM Investments Ltd 2.51% Shareholder structure Schroder Investment Management Ltd 2.40% As of 31 December 2018 1% 3% Unvested and unawarded shares for management and employees Vested shares held by management and employees 9 Vanguard Group Inc 2.27% 10 Jupiter Asset Management 2.22% 29% 28% US UK/Ireland Scandinavia 8% ■Luxembourg 5% 26% Other** BANK OF GEORGIA The Group has been included in the FTSE 250 and FTSE All-share Index Funds since 18 June 2012 * JSC Georgia Capital will exercise its voting rights at the Group's general meetings in accordance with the votes cast by all other Group Shareholders, as long as JSC Georgia Capital's percentage holding in Bank of Georgia Group PLC is greater than 9.9%. ** Includes 19.9% shareholding of JSC Georgia Capital 4#5DELIVERING ON GROUP STRATEGY SUCCESSFUL TRACK RECORD OF DELIVERING STRONG RESULTS BANKING BUSINESS KEY TARGETS 1 26.1% 2 25.2% Loan book 24.5% 21.4% 15.9% ROAE 20%+ 21.9% 22.2% growth 15%-20% 20.8% 2015 2016 2017 2018* 2015 2016 2017 2018 3 Robust Capital Management Track Record Regular Dividends Capital position: We aim to maintain +200bps buffer over minimum regulatory requirement Payout 30% 36% 33% 34% 32% 30% 30% ratio: 4.0% 4.4% 3.1% 3.1% 3.2% 2.4% 2.7% Maintain regular dividend payouts: Aiming 25-40% dividend payout ratio GEL 500mln+ cash dividend paid since 2013, with payout ratio above 30% over past 6 years Management trust buybacks: GEL 52.Omln share buy-backs in 2018 GEL millions 122 98 102 72 80 51 2013 2014 2015 2016 Total dividend paid during the year 2017 2018 2019 Dividend yield** BANK OF GEORGIA * 2018 results adjusted for GEL 30.3mln demerger related costs, GEL 8.0mln demerger related corporate income tax gain, and GEL 30.3mln one-off impact of re-measurement of deferred tax balances ** Dividend yield for 2013-2018 years is calculated based on the closing price of the shares immediately prior to ex-dividend date. Dividend yield for 2019 is calculated based on the closing price of the shares on 18 February 2019 LO 5#6BANK OF GEORGIA GROUP RESULTS HIGHLIGHTS GEL thousands unless otherwise noted Net interest income Net fee and commission income Net foreign currency gain Net other income (expense) Revenue Operating expenses Profit from associates Operating income before cost of risk Cost of risk Profit before non-recurring items and income tax Net non-recurring items Profit before income tax expense Income tax expense Profit from continuing operations Profit from discontinued operations Profit Earnings per share (basic) Earnings per share (diluted) BANK OF GEORGIA Income Statement | Quarterly Bank of Georgia Group Consolidated Banking Business* Discontinued Operations* 4Q18 4Q17 Change y-o-y 3Q18 Change 9-0-9 4Q18 4Q17 Change y-o-y 3Q18 Change q-o-q 4Q18 4Q17 Change y-o-y Change 3Q18 q-o-q 187,438 41,344 183,498 36,483 2.1% 185,335 13.3% 39,481 1.1% 4.7% 187,438 41,344 183,124 2.4% 185,335 1.1% 36,738 12.5% 39,481 4.7% 53,358 28,139 89.6% 36,827 44.9% 53,358 27,464 94.3% 36,827 44.9% (9,073) 12,708 NMF 7,437 NMF (9,073) 12,986 NMF 7,437 NMF 273,067 260,828 4.7% (100,857) 318 172,528 (40,778) (42,428) 131,750 120,043 (6,586) (98,612) 255 162,471 269,080 2.3% (97,137) 24.7% 326 6.2% 172,269 -3.9% (48,107) 1.5% 273,067 260,312 4.9% 269,080 1.5% (213) 9.8% NMF 125,164 119,830 (10,348) (11,050) 114,816 108,780 114,816 10,029 118,809 124,162 (3,747) 4.5% 120,415 -6.4% (9,316) 5.5% 111,099 NMF -3.4% 111,099 3.8% -2.5% 0.2% -15.2% 6.1% 75.8% (100,857) 318 172,528 (40,778) 131,750 (99,742) 255 160,825 (42,428) 118,397 1.1% 24.7% 326 7.3% 172,269 -3.9% (48,107) (97,137) 3.8% -2.5% 0.2% -15.2% 11.3% 124,162 6.1% 3.9% 11.1% 3.3% (6,586) (213) 125,164 118,184 (10,348) (11,050) 114,816 107,134 NMF 5.9% -6.4% (9,316) 7.2% (3,747) 75.8% 120,415 3.9% 11.1% 111,099 3.3% 11,675 NMF 3.3% 114,816 107,134 7.2% 111,099 3.3% 11,675 NMF 2.40 2.40 3.05 2.90 -21.3% -17.2% 2.32 2.32 3.4% 3.4% 2.40 2.40 2.91 2.77 -17.5% -13.4% 2.32 2.32 3.4% 3.4% * Banking Business and Discontinued Operations financials do not include inter-business eliminations. Detailed financials, including inter-business eliminations are provided on pages 58-60 6#7BANK OF GEORGIA GROUP RESULTS HIGHLIGHTS Income Statement | full-year Bank of Georgia Group Consolidated Change GEL thousands unless otherwise noted 2018 2017 2018 Banking Business* 2017 Discontinued Operations* y-o-y Change y-o-y 2018 2017 Change y-o-y Net interest income Net fee and commission income Net foreign currency gain Net other income Revenue Operating expenses Profit from associates 741,753 672,535 152,662 130,050 10.3% 17.4% 739,604 672,100 10.0% 153,182 131,474 16.5% 128,762 79,106 62.8% 129,437 86,060 50.4% 7,262 1,030,439 (376,852) 1,339 18,645 -61.1% 7,815 19,701 -60.3% 900,336 14.5% 1,030,038 (338,798) 11.2% Operating income before cost of risk 654,926 1,311 562,849 2.1% 16.4% Cost of risk (160,225) (167,296) -4.2% (378,517) 1,339 652,860 (160,225) 909,335 (342,936) 13.3% 10.4% 1,311 2.1% 567,710 15.0% (167,296) -4.2% Profit before non-recurring items and income tax 494,701 395,553 25.1% 492,635 400,414 23.0% Net non-recurring items (57,156) (4,300) NMF (57,328) (4,300) NMF Profit before income tax expense 437,545 391,253 11.8% 435,307 396,114 9.9% Income tax expense (56,665) (26,592) 113.1% Profit from continuing operations 380,880 364,661 4.4% (56,665) (26,592) 378,642 369,522 113.1% 2.5% Profit from discontinued operations Profit Earnings per share (basic) Earnings per share (diluted) Earnings per share (basic) adjusted** Earnings per share (diluted) adjusted** 107,898 98,788 9.2% 488,778 463,449 5.5% 378,642 369,522 2.5% 110,136 110,136 93,927 93,927 17.3% 17.3% 10.78 10.71 11.61 -7.1% 8.72 9.63 -9.4% 11.07 -3.3% 8.66 9.18 -5.7% 9.92 9.63 3.0% 9.86 9.18 7.4% BANK OF GEORGIA * Banking Business and Discontinued Operations financials do not include inter-business eliminations. Detailed financials, including inter-business eliminations are provided on pages 58-60 ** 2018 annual results adjusted for GEL 30.3mln demerger related costs, GEL 8.0mln demerger related corporate income tax gain, and GEL 30.3mln one-off impact of re-measurement of deferred tax balances 7#8BANK OF GEORGIA GROUP RESULTS HIGHLIGHTS Bank of Georgia Group Consolidated Balance Sheet Banking Business** Discontinued Operations** Chan GEL thousands unless otherwise noted Dec-18 Dec-17 Change y-o-y Sep-18 Change 9-0-9 Dec-18 Dec-17 Change y-o-y Change Change Sep-18 Liquid assets 4,540,032 Cash and cash equivalents 1,215,799 Amounts due from credit institutions 1,305,216 Investment securities 2,019,017 Loans to customers and finance lease receivables 9,397,747 Property and equipment. 344,059 988,436 Assets of disposal group held for sale 1,136,417 Total assets Client deposits and notes Amounts due to credit institutions. Borrowings from DFI 14,798,303 15,168,669 8,133,853 2,994,879 6,712,482 3,155,839 1,302,679 Short-term loans from NBG 1,118,957 4,373,251 3.8% 1,582,435 -23.2% 1,225,947 6.5% 1,564,869 29.0% 7,690,450 22.2% -65.2% NMF -2.4% 21.2% -5.1% 1,624,347 -19.8% 793,528 4,696,808 1,237,867 1,398,061 2,060,880 8,762,413 315,980 -3.3% -1.8% -6.6% -2.0% 7.3% 8.9% 4,540,032 4,346,509 4.5% 1,215,799 1,516,401 -19.8% 1,305,216 1,216,349 7.3% 2,019,017 1,613,759 25.1% 9,397,747 7,741,420 21.4% 344,059 322,925 6.5% ge 9-o-q 4,696,808 -3.3% Dec-18 Dec-17 Sep-18 y-o-y 9-0-9 445,501 NMF 1,237,867 -1.8% 374,301 NMF 1,398,061 -6.6% 2,060,880 -2.0% 8,762,413 7.3% 315,980 8.9% 38,141 NMF 33,059 NMF 661,176 NMF 1,165,182 NMF 14,314,932 7,932,536 3,006,739 1,261,960 Loans and deposits from commercial banks 573,243 737,964 Debt securities issued 1,730,414 1,709,152 Liabilities of disposal group held for sale Total liabilities Total equity Book value per share 13,000,030 1,798,273 516,663 12,436,299 2,732,370 37.59 41.0% -22.3% 1.2% NMF 4.5% -34.2% 65.22 -42.4% 1,016,431 728,348 1,578,532 3.4% 2.5% -0.4% 3.2% 10.1% -21.3% 14,798,303 12,907,678 8,133,853 7,078,058 2,994,879 2,778,338 1,302,679 1,297,749 14.6% 14.9% 7.8% 14,314,932 3.4% 7,932,536 2.5% 3,006,739 -0.4% 2,763,913 NMF 377,501 NMF 0.4% 1,261,960 3.2% 326,598 NMF 1,118,957 793,528 41.0% 1,016,431 10.1% 9.6% 573,243 1,730,414 687,061 -16.6% 1,386,412 24.8% 728,348 -21.3% 1,578,532 50,903 NMF 9.6% 357,442 NMF 619,026 NMF 12,644,984 1,669,948 34.89 2.8% 7.7% 7.7% 13,000,030 11,354,976 1,798,273 1,552,702 14.5% 15.8% 12,644,984 2.8% 1,669,948 7.7% 1,584,245 NMF 1,179,668 NMF Key Ratios* 4Q18 4Q17 3Q18 2018 2017 ROAA*** ROAE*** Net Interest Margin Loan Yield Liquid assets yield Cost of Funds Cost of Client Deposits and Notes 3.2% 3.4% 3.2% 3.2% 3.2% 26.2% 27.8% 26.8% 26.1% 25.2% 6.0% 7.3% 6.4% 6.5% 7.3% 12.8% 14.3% 13.5% 13.5% 14.2% 3.8% 3.4% 3.8% 3.8% 3.4% 5.0% 4.8% 5.0% 5.0% 4.7% 3.4% 3.5% 3.6% 3.5% 3.5% Cost of Amounts Due to Credit Institutions 7.9% 6.5% 7.4% 7.3% 6.4% Cost of Debt Securities Issued 7.8% 7.8% 7.8% 7.8% 7.4% Cost Income 36.9% 38.3% 36.1% 36.7% 37.7% NPLs to Gross Loans to Clients 3.3% 3.8% 3.5% 3.3% 3.8% NPL Coverage Ratio 90.5% 92.7% 91.7% 90.5% 92.7% NPL Coverage Ratio, Adjusted for discounted value of collateral Cost of Credit Risk 129.9% 130.6% 136.9% 129.9% 130.6% 1.1% 2.1% 2.0% 1.6% 2.2% NBG (Basel III) Tier I Capital Adequacy Ratio NBG (Basel III) Total Capital Adequacy Ratio 12.2% 16.6% 12.4% 17.9% 11.0% 15.9% 12.2% 12.4% 16.6% 17.9% * For the definition of Key Ratios, refer to page 70 BANK OF GEORGIA ** Banking Business and Discontinued Operations financials do not include inter-business eliminations. Detailed financials, including inter-business eliminations are provided on pages 58-60 *** 2018 annual results adjusted for GEL 30.3mln demerger related costs, GEL 8.0mln demerger related corporate income tax gain, and GEL 30.3mln one-off impact of re- measurement of deferred tax balances 8#9CONTENT ■ Group Overview 4 Results Discussion 10 • Georgian Macro Overview 35 ■ Appendices 56 BANK OF GEORGIA 9#10THE LEADING BANK IN GEORGIA BOG - Leading Bank in Attractive Banking Sector ■ Top Systemically important financial institution in Georgia Market position in Georgia by assets (34.7%), loans (33.5%), client deposits (33.9%) and equity (29.2%) as of 31 December 2018* Market with stable growth perspectives: Real GDP average annual growth rate of 4.5 % for 2007-2017; 4.8% real GDP growth in 2018 according to Geostat. Loans/GDP grew from 8.8% to 64.2% in the period of 2003-2018; Deposits/GDP grew from 8.4% to 55.7% over the same period ■ Strong brand name recognition and retail banking franchise: Offers the broadest range of financial products to the retail market through a network of 271 branches, 876 ATMs, 3,115 Express Pay Terminals and more than 2.4 million customers as of 31 December 2018 Sustainable high profitability with average ROAE of more than 20% over the last three years on the back of strong NIM, low cost of risk and stringent cost control ■Resilient credit profile: Well-capitalised, diversified and high quality loan book and strong liquidity profile High standards of transparency and governance: The first entity from Georgia to be listed on the premium segment of the Main Market of the London Stock Exchange (LSE:BGEO) since February 2012. LSE listed through GDRs since 2006 Credit ratings from global rating agencies Rating Agency Outstanding profitability and solid growth momentum, on the back of strong capital and liquidity positions Banking Business CAGR GEL billions 20 Balance Sheet Highlights 20.9% 14.8 15 12.9 11.1 9.1 10 6.9 Total assets 20.6% 4.4 5.4 6.77.7 9.4 23.6% 8.1 7.1 .5.0 5.8 3.5 Client deposits Net loans ■31-Dec-17 ■31-Dec-14 31-Dec-15 ■31-Dec-16 Income Statement Highlights Banking Business 4.9% GEL millions 7.2% 300 260 269 273 253 235 250 200 150 100 50 107 102 104** 115 111 ■31-Dec-18 27.8% 26.8% 26.2% 26.2% 25.4%** MOODY'S Fitch Ratings BANK OF GEORGIA Rating Outlook Affirmed Ba3/Ba2 Stable 14-Aug-18 BB- Positive 23-Apr-18 Revenue Profit ROAE 4Q17 1Q18 2Q18 3Q18 4Q18 * Market data based on standalone accounts as published by the National Bank of Georgia (NBG) www.nbg.gov.ge ** 2Q18 results adjusted for GEL 30.3mln demerger related costs, GEL 8.Omln demerger related corporate income tax gain, and GEL 30.3min one-off impact of re-measurement of deferred tax balances 10#11THE COMPETITION Leading market position in Georgia by assets (34.7%), loans (33.5%), client deposits (33.9%) and equity (29.2%) Peer group's market share in total assets Peer group's market share in gross loans 50% 38.2% 40% 34.7% 30% 20% 10% 50% 38.8% 40% 33.5% 30% 20% 15.7% 14.6% 10% 4.7% 4.1% 3.8% 3.9% 4.2% 3.9% 0% LB VTB PCB Others BOG TBC BR LB VTB PCB Others 2016 2017 2018 2016 2017 2018 0% BOG TBC BR Foreign banks market share by assets 2006 Peer group's market share in client deposits 2018 50% 41.2% 40% 33.9% No state ownership of Foreign 30% Foreign banks banks, 19.7% commercial 32.0% 20% banks since 1994 Local Local banks, 68.0% banks 10% 80.3% 10.9% 6.4% 4.6% 3.0% 0% BOG TBC BR LB VTB 2016 2017 2018 PCB Others BANK OF GEORGIA 1 Market data based on standalone accounts as published by the National Bank of Georgia (NBG) as of 31 December 2018 www.nbg.gov.ge 2 TBC's market shares for 2017 include Bank Republic numbers 11#12GEL millions GEL millions STRONG UNDERLYING PERFORMANCE Revenue growth | quarterly Banking Business +4.9% +1.5% 269.1 273.1 300 260.3 30% 77.2 83.8 31% 85.7 31% 200 70% 100 69% 183.1 185.3 187.4 69% GEL millions Banking Business Revenue growth | full-year +13.3% 1,200 1,030.0 909.3 900 290.4 28% 237.2 26% 600 300 672.1 739.6 74% 72% 4Q17 3Q18 4Q18 Net interest income Net non-interest income Net non-interest income | quarterly Banking Business +10.9% Banking Business +2.2% 2017 2018 ■Net interest income ■Net non-interest income Net non-interest income | full-year +22.4% 300 237.2 110 83.8 77.2 90 13.0 7.5 70 53.4 36.8 50 27.5 30 36.7 39.5 10 -10 4Q17 85.7 GEL millions 250 19.6 290.4 7.8 129.4 200 86.1 150 100 153.2 131.5 41.3 50 ○ (9.0) 3Q18 4Q18 2017 2018 Net fee and commission income Net other income Net foreign currency gain I Net fee and commission income Net other income Net foreign currency gain BANK OF GEORGIA 12#13STRONG UNDERLYING PERFORMANCE Operating expenses | quarterly Banking Business +1.1% +3.8% → 120 99.7 100.9 97.1 1.2 100 1.2 1.0 GEL millions 10.5 11.4 11.2 80 32.2 30.0 30.8 60 40 55.8 54.1 58.3 20 O Operating expenses | full-year Banking Business GEL millions +10.4% 400 342.9 378.5 4.0 3.4 45.4 320 41.0 113.3 240 100.3 160 198.2 215.8 80 4Q17 3Q18 4Q18 2017 Other operating expenses Depreciation and amortisation Administrative expenses ■Salaries and other employee benefits O Other operating expenses Administrative expenses Operating income before cost of risk | quarterly Banking Business 200 150 GEL millions 100 50 160.8 172.3 -50 -100 4Q17 (42.6) 3Q18 (51.9) 2018 Depreciation and amortisation ■Salaries and other employee benefits Operating income before cost of risk | full-year Banking Business 800 172.5 600 GEL millions 400 200 4Q18 (47.4) Cost of risk and net non-recurring items Operating income before cost of risk BANK OF GEORGIA * 2018 net non-recurring items include GEL 30.3mln demerger related costs 2017 -200 (171.6) -400 567.7 2018 (217.6) Cost of risk and net non-recurring items* Operating income before cost of risk 652.9 13#14GEL millions FOCUS ON EFFICIENCY Cost / Income | quarterly Banking Business Cost / Income | full-year Banking Business 39% 39% 37% 37% 38.3% 37.7% 35% 36.9% 35% 36.7% 36.1% 33% 33% 31% 31% 29% 29% 27% 27% 25% 25% 4Q17 3Q18 4Q18 2017 2018 Revenue and operating expenses | quarterly Banking Business Operating Leverage: +3.8% y-o-y Banking Business 300 250 269.1 273.1 260.3 200 150 99.7 97.1 100.9 100 50 4Q17 ■Revenue 3Q18 BANK OF GEORGIA 4Q18 Operating expenses GEL millions Revenue and operating expenses | full-year Operating Leverage: +2.9% y-o-y 1,200 1,030.0 1,000 909.3 800 600 342.9 378.5 400 200 O 2017 2018 ■Revenue Operating expenses 14#15GROWING INCOME NOTWITHSTANDING THE PRESSURE ON YIELDS Loan Yields | quarterly Loan Yields | full-year Banking Business 120% Banking Business 14.3% 13.5% 12.8% 15% 14.7% 14.2% 14.2% 120% 13.5% 15% 100% 100% 80% 10% 61.7% 60.7% 80% 10% 61.7% 60% 61.7% 61.7% 60% 72.0% 71.3% 40% 5% 40% 5% 20% 38.3% 39.3% 38.3% 20% 38.3% 38.3% 28.0% 28.7% 0% 0% 0% 0% 4Q17 3Q18 4Q18 2015 2016 Net loans, FC, consolidated Net loans, GEL, consolidated Currency-blended loan yield, annualised Loan Yields, Local currency | quarterly I Net loans, FC, consolidated Currency-blended loan yield 2017 2018 Net loans, GEL, consolidated Loan Yields, Foreign currency | quarterly Banking Business Banking Business 22% 21.3% 12% 10.0% 21% 19.9% 19.7% 10% 9.0% 8.3% 20% 8% 19% 6% 18% 4% 17% 16% 2% 15% 0% 4Q17 3Q18 4Q18 4Q17 3Q18 4Q18 BANK OF GEORGIA 15#16STABLE COST OF FUNDING Cost of Customer Funds | quarterly Cost of Customer Funds | full-year Banking Business Banking Business 120% 3.5% 3.6% 4% 120% 3.4% 4.3% 5% 3.8% 3.5% 3.5% 100% 100% 4% 3% 80% 80% 3% 69.5% 65.6% 67.5% 60% 2% 60% 74.9% 69.5% 67.5% 76.8% 2% 40% 40% 1% 20% 1% 30.5% 34.4% 32.5% 20% 25.1% 30.5% 32.5% 23.2% 0% 0% 0% 0% 4Q17 3Q18 4Q18 2015 2016 2017 2018 Client deposits, FC, consolidated Client deposits, GEL, consolidated Currency-blended cost of client deposits, annualised I Client deposits and notes, FC, consolidated Client deposits and notes, GEL, consolidated Currency-blended cost of client deposits and notes Cost of Funds | full-year Cost of Funds | quarterly Banking Business Banking Business 6% 6% 5.0% 5.0% 5.1% 5.0% 4.8% 4.7% 4.7% 5% 5% 4% 4% 3% 3% 2% 2% 1% 1% 0% 0% 4Q17 3Q18 4Q18 2015 2016 2017 2018 BANK OF GEORGIA 16#17DIVERSIFIED ASSET STRUCTURE AND LOAN PORTFOLIO Total asset structure | 31 December 2018 Liquid assets | 31 December 2018 Banking Business Bank of Georgia Standalone Other assets 5.8% Total: GEL 14.8bln Liquid assets Loans to customers, net 63.5% Total Gross Loans breakdown by segments Total: GEL 9.2bln Retail loans, GEL 6,389.1 mln, 69.8% Corporate loans, GEL 2,761.2 min, 30.2% BANK OF GEORGIA 30.7% Banking Business Other liquid assets 20.3% Cash and equivalents 26.8% Total: GEL 4.5bln Government bonds, treasury bills, NBG CDs 24.2% Amounts due from credit institutions 28.7% Loans breakdown | 31 December 2018 Retail Banking Net Loans breakdown by product 18.6% of Total: GEL 6.3bln Corporate Investment Banking Gross Loans breakdown by sectors Total: GEL 2.8bln total clients Credit cards and overdrafts 4.3% 23.2% of total clients Other 2.7% 1.6% of total clients Mining and quarrying 4.1% General consumer Mortgage loans loans 40.4% 21.1% Micro- and agro- financing loans and SME loans 31.5% 2.8% of total clients Financial intermediation_ Health and social work 3.6% Other 8.2% Manufacturing 32.8% 1.5% Electricity, gas and- water supply Construction 10.0% 2.7% Hospitality 7.0% Trade Transport & 16.0% Real Communication_ 2.0% Service estate 3.1% 9.0% 17#18LOAN PORTFOLIO BREAKDOWN GEL millions Retail Banking | 31 Dec 2018 Corporate Investment Banking | 31 Dec 2018 JSC Bank of Georgia standalone JSC Bank of Georgia standalone 1.9% 0.2% 122 6,389 2 861 3.4% 3,227 109 2,302 Loan portfolio Amounts in GEL millions GEL and other currency loans* USD loans with USD income USD loans with non-USD income Total *Includes credit cards BANK OF GEORGIA 11 Provision amount USD GEL Other 0.5% LLR rate GEL millions 5.2% 4.9% 2,761 143 513 25 491 26 5.4% 1,757 91 Loan portfolio Provision amount USD GEL Other 5.2% LLR rate RB Loan portfolio 4,088 397 % of total RB loan portfolio Consumer CB & WM % of total CB Mortgages SME & Micro loans* Amounts in GEL millions Loan portfolio loan portfolio 64.0% 6.2% 1,235 316 1,614 56 1,239 25 GEL and other currency loans* USD loans with USD income 1,004 36.4% 1,058 38.3% 1,905 29.8% 988 175 6,389 100.0% 2,539 1,845 741 2,005 USD loans with non-USD income Total 699 25.3% 2,761 100.0% Note: Standalone figures derived from management accounts 18#19RESILIENT LOAN PORTFOLIO QUALITY Loan loss reserve and NIM NPL composition Banking Business NPL Banking Business coverage ratio 83.4% 86.7% 92.7% 90.5% 7.7% 7.4% 7.3% 500 400 8% 4.3% 5% 4.2% 6.5% 3.8% 400 3.3% 4% 300 5.0% 5.1% 4.7% 4.9% 6% 318 295 301 300 27 241 3% 38 49 200 4% 35 159 200 2% 279 288 256 202 185 100 201 2% 161 100 1% 133 0% 45 55 68 О 0% 2015 2016 2017 2018 2015 2016 2017 2018 Loan loss reserves (LLR), GEL mln Net Interest Margin Risk Adjusted NIM INPLS RB, GEL mln NPLs Other, GEL mln NPLS CIB, GEL mln NPLs to gross loans Cost of Credit Risk Cost of Risk Banking Business -100bps -90bps 2.2% 1.6% Banking Business -60bps -3.9% -4.2% 3.0% 180 160 2.5% 2.1% 2.0% 2.0% 1.5% 1.1% GEL millions 140 120 100 80 1.0% 60 48 41 42 40 0.5% 20 0.0% O 4Q17 3Q18 4Q18 2017 2018 4Q17 3Q18 4Q18 2017 2018 167 160 -15.2% BANK OF GEORGIA 19#20STRONG LIQUIDITY Liquid assets to total liabilities Liquidity coverage ratio & net stable funding ratio JSC Bank of Georgia standalone (Basel III Liquidity) Banking Business 38.5% 37.9% 38.3% 34.9% 250% 15,000 40% 199.5% 13,000 11,355 200% 12,000 GEL millions 9,771 30% 151.5% 133.6% 7,803 150% 125.5% 9,000 120.1% 111.9% 20% 97.0% 100.3% 100% 6,000 3,705 4,347 4,540 3,001 10% 3,000 50% 0% 0% 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-15 31-Dec-16 Liquid assets Total liabilities Liquid assets to total liabilities Liquidity coverage ratio 31-Dec-17 31-Dec-18* ■Net stable funding ratio Net loans to customer funds & DFI Banking Business Cumulative maturity gap | 31 December 2018 Banking Business 140% 1,407,706 1,500,000 1,132,220 25% 1,078,634 130% 116.1% 115.5% 818,169 20% 1,000,000 120% 107.1% 109.4% 110% 100% 90% 99.6% 94.9% 92.4% 80% 90.5% GEL thousands 15% 500,000 9.5% 7.7% 5.5% (1,009,243) 7.3% (1,717,481) 10% O 5% 70% 60% -500,000 -1,000,000 -1,500,000 On 0-3 3-6 6-12 Demand Months Months Months 1-3 Years 3 Years 0% -5% -6.8% -10% 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 -2,000,000 -11.6% -15% Net loans to customer funds & DFIs Net loans to customer funds Maturity gap Maturity gap, as % of total assets * The ratios at 31 December 2018 are calculated for standalone JSC Bank of Georgia according to the guidelines set by National Bank of Georgia BANK OF GEORGIA 20#21STRONG NBG (BASEL III) CAPITAL ADEQUACY POSITION Capital adequacy requirements introduced by National Bank of Georgia in December 2017 Transition to Basel III Standards: Systemic capital surcharge: 2.5% of risk weighted assets to be phased-in during the following years as per below schedule: Capital Adequacy Ratios Systemic Buffer 31-Dec-17 0% 31-Dec-18 1.0% 31-Dec-19 1.5% 31-Dec-20 2.0% 31-Dec-21 2.5% 15% Currency induced credit risk ("CICR") buffer was introduced instead of additional 75% weighting of FX denominated loans. 56% of CICR buffer should be held on CET1 level, 75% on Tier 1 level and 100% on total capital 12.4% 12.5% 20% 17.3% 17.5% 16.6% 15.9% 12.2% 11.0% 10% General Risk Assessment Program ("GRAPE") for individual banks: GRAPE buffer is set at 2.2%. GRAPE buffer will be reviewed annually and will be phased-in on different levels of capital according to the below schedule: 5% 31-Dec-17 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 CET 1 Tier 1 0% 15% 30% 45% 56% 0% 20% 40% 60% 75% Total Capital 0% 100% 100% 100% 100% Credit Portfolio Concentration buffer, effective from 1 April 2018 and phased in over the four year period on different levels of capital according to the above schedule Net Stress Test buffer effective from 1 January 2020 0% 1Q18 2Q18 3Q18 4Q18 ■Tier I Capital Adequacy Ratio Total Capital Adequacy Ratio Risk Weighted Assets In the view of above, Bank of Georgia became subject to the following minimum capital requirements: 12,000 11,339 10,719 9,670 9,790 CET 1 Tier 1 Total Capital 31-Dec-17 31-Dec-18 31-Dec-19 Estimate⭑ 31-Dec-20 Estimate* 8.1% 9.5% 10.4% 9.9% 11.4% 12.5% 11.1% 13.3% 11.1% 11.8% 13.2% 14.1% 12.4% 15.9% 16.5% 16.7% 16.0% 17.1% Fully Loaded range* from 31-Dec-21 9,000 GEL millions 6,000 3,000 * Indicated minimum capital adequacy ratios contain Pillar 1 and Pillar 2 buffer estimates. Range provides our best minimum and maximum estimates of the variable buffers Transition to Basel III is not expected to affect the Bank's growth prospects or its ability to maintain dividend distributions within the existing dividend policy payout range BANK OF GEORGIA O 1Q18 2Q18 3Q18 4Q18 21 21#22STRONG NBG (BASEL III) CAPITAL ADEQUACY POSITION Capital Management Fully-loaded Common Equity Tier 1 (CET1) minimum requirement already achieved ■ CET1 ratio stood at 12.2% compared to 9.5% minimum requirement at 31 December 2018, and already above the estimated fully-loaded CET1 requirement range of 11.1% to 11.8% for 31 December 2021 Tier 1 Capital Adequacy Ratio Evolution 15% 12.4% 13% 1.6% 0.4% 1.1% 11% 9% JSC Bank of Georgia standalone 3.5% 0.5% 0.2% 12.2% 7% Capital Adequacy Robust internal capital generation of c. 350bps per annum Existing additional capital buffers (within c. 2.2% of RWAs) reflecting differences in provisioning between NBG methodology and IFRS 9 Capital Buffer We aim to maintain c.+200bps over minimum regulatory requirements Optimise Capital Structure NBG regulation now enables AT1 issuance in US Dollars. This can add currency diversification to our capital structure and is a natural hedge against balance sheet dollarisation 5% Dec-17 costs Business Demerger Dividend Growth 2018 profit One-off GEL regulatory Devaluation changes Dec-18 BOG Equity vs. Tier 1 Regulatory Capital | 31 Dec 2018 % of RWAs 12.2% GEL millions 1.4% 0.8% 1.1% 130 1,764 1,800 92 162 1,380 1,500 1,200 900 600 300 О NBG Tier 1 Capital Loan provisioning methodology difference IP provisioning methodology difference Other deductions* BOG Equity (IFRS) 3.3% BANK OF GEORGIA * Other deductions Include revaluation reserve, investments in non-financial subsidiaries and intangible assets 22#23WELL-ESTABLISHED FUNDING STRUCTURE Interest Bearing Liability structure | 31 December 18 Banking Business Interest Bearing Liabilities GEL 13.Obln Well diversified international borrowings | 4Q18 Banking Business Borrowings, GEL 1,408.9 mln, 11.0% Debt securities issued, GEL 1,730.4 mln, 13.5% Client deposits & Current accounts and Time deposits, 50.0% demand deposits, Other amounts due to credit institutions, GEL 1,586.0 mln, notes, GEL 8,133.9 mln, 63.3% 12.3% 50.0% Borrowed funds maturity breakdown* Banking Business 500 4.6% 400 1.5% 1.0% 300 257 488 10% 8.8% 5% 1.7% 339 0.1% 0.0% 0% 200 0.6% 187 94 -5% 65 100 90 53 70 85 33 84 4 2 4 -10% 2019 2020 2021 2022 2023 2024 2025 2026 Senior Loans | Subordinated Loans Eurobonds % of Total assets BANK OF GEORGIA * converted at GEL/US$ exchange rate of 2.6766 as of 31 December 2018 ** source: Bloomberg の European Bank for Reconstruction and Development OPIC KFW DEG ADB IFC FMO Finance for Development Black Sea Trade & Development Bank EFSE EUROPEAN FUND FOR SOUTHEAST EUROPE Other debt securities, GEL 380.5 mln, 12.1% Others borrowings, GEL 106.2 mln, 3.4% DFIs, GEL 1,302.7 mln, 41.5% Eurobonds, GEL 1,349.9mln, 43.0% Highlights for 2018 Banking Business has a well-balanced funding structure with 63.3% of interest bearing liabilities coming from client deposits and notes, 10.1% from Developmental Financial Institutions (DFIs) and 10.5% from Eurobonds and notes issued, as of 31 December 2018 The Bank has also been able to secure favorable financing from reputable international commercial sources, as well as DFIs, such as EBRD, IFC, EFSE, BSTDB, FMO, etc. As of 31 December 2018, GEL 150 million undrawn facilities from DFIs with up to eight years maturity In July 2016, BGEO Group issued 7 year, US$ 350mln Eurobonds with 6.00% coupon (bonds were pushed down to BOG in March 2018). Bonds were trading at 6.271%** on 11 February 2019 In June 2017, BOG issued 3 year, GEL 500mln local currency international bonds with 11.00% coupon. Bonds were trading at 10.550%** on 11 February 2019 23#24RETAIL BANKING HIGHLIGHTS Data as at 31 December 2018 for JSC Bank of Georgia standalone 1 2 BANK OF GEORGIA EXPRESS 3 BANK OF GEORGIA Segments Clients Emerging Retail 539 k Mass Retail 1,663 k SOLO Mass Affluent 4 BANK OF GEORGIA BUSINESS 44 k MSME 195k Loans GEL 306 mln GEL 2,091 mln GEL 1,816 mln GEL 2,176 mln Deposits GEL 218 mln GEL 1,766 ml GEL 1,691 min GEL 664m min 2018 Profit* GEL 40 mln GEL 109 mln GEL 56 mln GEL 79 mln Profit per client* GEL 75 GEL 67 GEL 1,455 GEL 440 P/C ratio 3.3 1.7 5.4 1.4 Branches 165 94 12 n/a BANK OF GEORGIA 2018 profit adjusted for demerger related expenses and one-off impact of re-measurement of deferred tax balances 24#25RETAIL BANKING HIGHLIGHTS Income Statement Highlights Market Position* Change Change GEL thousands unless otherwise noted 4Q18 4Q17 3Q18 2018 2017 y-o-y q-o-q Net interest income 136,894 134,517 1.8% 136,040 0.6% Net fee and commission income 32,915 28,511 15.4% 30,651 7.4% Net foreign currency gain 24,047 8,407 NMF 17,381 38.4% 546,872 118,858 56,358 480,955 Change y-o-y 13.7% Market Share by Loans Market Share by Deposits 99,790 19.1% 37.5% 28,937 94.8% Net other income (expense) (5,420) 4,531 NMF 2,022 NMF 1,371 5,029 -72.7% 35.5% Revenue 188,436 175,966 7.1% 186,094 1.3% 723,459 Salaries and other employee benefits (37,053) (35,778) 3.6% (34,830) 6.4% (138,635) (125,668) Administrative expenses (21,620) (22,461) -3.7% (22,619) -4.4% Depreciation and amortisation (9,857) (9,020) Other operating expenses (637) Operating expenses Profit from associate Operating income before cost of risk (69,167) 318 119,587 (1,098) (68,357) 255 107,864 9.3% -42.0% 1.2% (9,556) (592) 3.1% 7.6% 24.7% 10.9% Cost of risk (37,487) (22,867) 63.9% (67,597) 326 118,823 (35,155) 2.3% -2.5% Profit before non-recurring items and income tax 82,100 84,997 -3.4% Net non-recurring items (4,088) (74) NMF Profit before income tax 78,012 84,923 -8.1% Income tax expense Profit (5,785) (7,335) 72,227 77,588 -21.1% -6.9% 83,668 (1,947) 81,721 (5,998) 75,723 0.6% 6.6% -1.9% 110.0% -4.5% -3.6% -4.6% 17.7% 10.3% (84,323) (72,464) 16.4% (39,133) (34,741) 12.6% (2,333) (2,279) 2.4% (264,424) (235,152) 1,339 1,311 460,374 380,870 20.9% (130,714) (110,800) 18.0% 614,711 34.9% 36.9% 34.6% 33.2% 33.0% 32.4% 12.4% 0.0% (35,110) 294,550 (36,292) 258,258 329,660 270,070 22.1% (2,358) NMF 267,712 10.0% (18,046) 101.1% 249,666 3.4% 2015 2016 2017 2018 2015 2016 2017 2018 Loan Yield Deposit Cost 3.9% 120% 17.6% 20% 120% 4% 16.8% 16.1% 3.3% 2.9% 2.9% 15.1% 100% 100% 15% 3% 80% 80% 54.3% 48.8% 50.3% 60.8% 60% 10% 60% 74.1% 75.0% 72.1% 69.7% 2% 40% 40% 1% 5% 20% 45.7% 51.2% 49.7% 20% 39.2% 25.9% 25.0% 27.9% 30.3% 0% 0% 0% 0% 2015 2016 2017 2018 2015 2016 2017 2018 I Net loans, RB, FC I Client deposits, RB, FC Net loans, RB, GEL Client deposits, RB, GEL Currency-blended cost of client deposits, RB Currency-blended loan yield, RB BANK OF GEORGIA * Market shares by Loans and Deposits to Individuals 25#26RETAIL BANKING LOAN YIELD, COST OF DEPOSITS & NIM RB Loan Yield I quarterly RB Loan Yield I full-year 30% 20% 10% 30% 22.7% 20.8% 20.7% 23.6% 21.5% 15.9% 14.8% 14.2% 20% 16.1% 15.1% 8.8% 7.9% 7.4% 9.1% 7.9% 10% 0% 0% Loan Yield Loan yield, GEL Loan yield, FC Loan Yield 2017 Loan yield, GEL 2018 Loan yield, FC 4Q17 3Q18 4Q18 RB Cost of Deposit I quarterly RB Cost of Deposit I full-year 6% 4.5% 4.9% 5.0% 6% 4.9% 4.5% 4% 2.8% 2.8% 2.9% 4% 2.2% 2.0% 2.1% 2.9% 2.9% 2.3% 2.0% 2% 2% 0% 0% Cost of deposits Cost of deposits, GEL Cost of deposits, FC Cost of deposits 4Q17 3Q18 4Q18 2018 Cost of deposits, GEL Cost of deposits, FC 2017 RB NIM I quarterly RB NIM I full-year 12% 12% 10% 10% 8.4% 8.5% 7.5% 7.2% 8% 6.7% 8% 6% 6% 4% 4% 4Q17 3Q18 4Q18 2017 2018 BANK OF GEORGIA 26#27RETAIL BANKING - LEADING RETAIL BANK IN GEORGIA Operating Data, GEL mln Number of total Retail clients, of which: Number of Solo clients Consumer loans & other outstanding, volume Consumer loans & other outstanding, number Mortgage loans outstanding, volume Mortgage loans outstanding, number Micro & SME loans outstanding, volume RB Client Data RB Portfolio | 31 Dec 2018 Net Loans by products Total: GEL 6.3bln Credit cards and overdrafts 2018 % of clients 2017 2016 2015 2,440,754 44,292 1,555 1.8% 566,740 23.2% 2,539 39,007 1.6% 2,315,038 32,104 1,480 738,694 1,706 26,643 2,141,229 19,267 1,104 647,441 1,999,869 11,869 836 625,458 1,228 16,300 809 12,857 23.2% of total clients 2,005 1,637 1,346 904 Micro & SME loans outstanding, number 68,832 2.8% 53,732 Credit cards and overdrafts outstanding, volume 290 Credit cards and overdrafts outstanding, number Credit cards outstanding, number, of which: 454,512 18.6% 308 480,105 547,038 American Express cards 105,899 22.4% 4.3% 673,573 97,178 36,379 291 442,487 800,621 79,567 19,045 306 435,010 754,274 100,515 4.3% General consumer loans 21.1% 18.6% of total clients Other 2.7% Mortgage loans 40.4% Micro- and agro- financing loans and SME loans 31.5% 1.6% of total clients 2.8% of total clients RB Loans GEL millions GEL millions RB Deposits +24.2% +32.8% 7,000 5,000 6,267 4,339 6,000 5,044 4,000 3,267 5,000 3,902 3,000 4,000 2,414 2,796 1,880 3,000 2,000 2,000 1,000 1,000 O O 2015 2016 2017 2018 2015 2016 2017 2018 BANK OF GEORGIA Deposits by currency Total: GEL 4.3bln Client Deposits, GEL Deposits by category Total: GEL 4.3bln 30% Client Deposits, FC 70% Time deposits 56% Current accounts and on demand deposits 44% 27#28RETAIL BANKING FINANCIAL DATA Balance Sheet | 31 December 2018 Income Statement | 2018 JSC Bank of Georgia Standalone 5% JSC Bank of Georgia Standalone Total Gross Loans GEL 6,389min 28% 33% 34% ■Mass Retail (GEL 2,091mln) ■MSME (GEL 2,176mln) Solo (GEL 1,816mln) Express Bank (GEL 306mln) JSC Bank of Georgia Standalone BANK OF GEORGIA 23% 39% 15% 23% ■Mass Retail (GEL 216mln) ■MSME (GEL 126mln) Solo (GEL 79mln) Express Bank (GEL 126mln) Total Deposits GEL 4,339min JSC Bank of Georgia Standalone 5% 41% 39% 15% 21% 37% 22% 20% Mass Retail (GEL 1,766mln) IMSME (GEL 664mln) ■Solo (GEL 1,691 mln) Express Bank (GEL 218mln) ■Mass Retail (GEL 37mln) ■MSME (GEL 19mln) Solo (GEL 21mln) Express Bank (GEL 21mln) Net Interest Income GEL 547min Net Fee & Commission Income GEL 98mln 28#29RETAIL BANKING - DIGITAL PENETRATION Digital Channel Statistics Internet Bank Transactions iBank S cod Р 05006306600806330 Boltage lugej golshingfol Mobile Bank Transactions 5.5 1.5 bfingu 1.5 1.5 1.4 1.4 4.1 3.2 2.8 2.3 620 530 426 427 452 697 539 408 279 317 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 Volume of transactions, GEL millions # of transactions, millions Number of Active Users | '000 219 177 334 295 247 247 4Q17 Internet Bank 1Q18 2Q18 3Q18 4Q18 I Volume of transactions, GEL millions # of transactions, millions Digital vs. Non-digital Transactions სამართველოს პაწი 8063430 დაამყვი პაროლი? I ინტერნეტბანკში რეგისტრაცია (1) ონლაინკონსულტაც19 GLOBAL FINAN # of transactions in millions 14.2 2018 12.2 DIGITAL BANK OF DISTINCTION 11.5 10.3 10.5 вось დადგა ზამთარი გისურვებთ ჯანმრთელობას, ბედნიერებასა და თქვენი ყველა მინის Bekerebriaa! mBank საქართველოს ბანკის მობილბანკი შენი მობილური ცხოვრებისთვის www.mBank.ge mBank Downloads 3.6 3.4 3.7 3.0 2.7 595,541 mBank downloads since May 2017 iPhone, 185,327 1Q18 Through digital channels 2Q18 3Q18 4Q18 Through tellers Android, 410,214 3Q18 4Q18 4Q17 Mobile Bank BANK OF GEORGIA 15,000.00 23.800.00 B000 15,000 65.00 USAZGEORGA 100 333,850 mBank downloads in 2018 29#30CORPORATE INVESTMENT BANKING HIGHLIGHTS Income Statement Highlights Market Position* Change GEL thousands unless otherwise noted 4Q18 4Q17 3Q18 y-o-y Change 9-0-9 2018 2017 Net interest income 43,696 42,539 2.7% 42,076 3.9% 165,723 156,171 Net fee and commission income Net foreign currency gain 6,939 5,859 18.4% 7,187 -3.5% 26,680 22,717 Change y-o-y 6.1% 17.4% Market Share by Loans Market Share by Deposits 23,984 15,585 53.9% 13,815 73.6% 54,702 46,276 18.2% Net other income (expense) (3,451) 7,710 NMF 5,276 NMF 6,699 14,256 Revenue 71,168 71,693 -0.7% 68,354 4.1% 253,804 239,420 Salaries and other employee benefits (14,645) (15,271) Administrative expenses (4,921) (5,439) -4.1% (13,827) -9.5% 5.9% (54,792) (54,573) -53.0% 6.0% 0.4% 31.7% 30.5% 32.7% 33.1% 31.2% 30.3% (5,329) -7.7% (17,409) (16,190) 7.5% Depreciation and amortisation (1,122) (1,316) -14.7% (1,245) -9.9% (4,945) (5,134) -3.7% 28.9% 28.8% Other operating expenses Operating expenses (347) (21,035) (228) 52.2% (22,254) -5.5% (431) (20,832) -19.5% (1,175) 1.0% (78,321) (761) (76,658) 54.4% 2.2% Operating income before cost of risk 50,133 49,439 1.4% 47,522 Cost of risk (3,407) (18,788) -81.9% (12,235) 5.5% -72.2% 175,483 (25,888) (47,403) 162,762 7.8% -45.4% Profit before non-recurring items and income 46,726 30,651 52.4% 35,287 32.4% 149,595 115,359 29.7% tax Net non-recurring items (1,711) (134) Profit before income tax Income tax expense Profit 45,015 30,517 NMF 47.5% (775) 120.8% (13,630) (1,882) NMF 34,512 30.4% 135,965 113,477 19.8% (3,401) (2,840) 19.8% (2,434) 39.7% (16,827) (7,584) 121.9% 2015 2016 2017 2018 2015 2016 2017 2018 41,614 27,677 50.4% 32,078 29.7% 119,138 105,893 12.5% Loan Yield Deposit Cost 120% 10.7% 10.4% 10.7% 10.2% 12% 120% 5% 4.1% 3.9% 4.0% 4.1% 100% 100% 4% 9% 80% 80% 63.1% 61.2% 3% 60% 90.0% 83.3% 83.1% 82.3% 6% 72.2% 60% 74.8% 2% 40% 40% 3% 1% 20% 20% 36.9% 38.8% 0% 10.0% 2015 16.7% 16.9% 17.7% 27.8% 25.2% 0% 0% 0% 2016 2017 2018 2015 2016 2017 2018 I Net loans, CIB, FC I Client deposits, CIB, FC Net loans, CIB, GEL I Client deposits, CIB, GEL Currency-blended loan yield, CIB BANK OF GEORGIA * Market shares by Loans and Deposits to Legal Entities Currency-blended cost of client deposits, CIB 30#31CORPORATE INVESTMENT BANKING LOAN BOOK & DEPOSITS Highlights Portfolio breakdown | 31 December 2018 Loans by sectors ☐ Leading corporate bank in Georgia Integrated client coverage in key sectors c.2,500 corporate clients served by dedicated relationship bankers Mining and quarrying 4.1% Financial intermediation ✓ 1.5% Health and social work 3.6% Other 8.2% Construction 10.0% Manufacturing 32.8% Electricity, gas and water supply 2.7% Transport & Communication_ 2.0% Hospitality 7.0% Trade 16.0% Real Service estate 3.1% 9.0% GEL millions 4,000 Loans & Deposits Deposits by category 3,457 3,473 2,618 3,500 3,059 2,871 3,000 2,395 2,500 2,211 2,260 2,000 1,500 1,000 500 O 2015 2016 2017 2018 Net loans, CIB Client deposits, CIB BANK OF GEORGIA Top 10 CIB borrowers represent 34.5% of total CIB loan book Top 20 CIB borrowers represent 49.0% of total CIB loan book Deposits by currency Time deposits Current Client Deposits, 38.5% Client accounts and demand GEL deposits 61.5% deposits, 38.8% FC 61.2% 31#32CIB LOAN YIELD, COST OF DEPOSITS & NIM CIB Loan Yield I quarterly CIB Loan Yield I full-year 15% 12.3% 13.5% 12.8% 15% 12.8% 13.1% 11.2% 10.8% 9.8% 11.0%10.2% 9.2% 10.7% 10.2% 10.3% 9.6% 10% 10% 5% 5% 0% 0% Loan Yield ■4Q17 Loan yield, GEL 3Q18 4Q18 Loan yield, FC Loan Yield Loan yield, GEL 2017 2018 Loan yield, FC CIB Cost of Deposit I quarterly CIB Cost of Deposit I full-year 8% 6.6% 6.6% 6.2% 8% 6.6% 6.4% 6% 4.0% 4.4% 4.0% 6% 4.0% 4.1% 4% 2.5% 2.4% 2.3% 2.7% 2.4% 4% 2% 2% 0% 0% Cost of deposits Cost of deposits, GEL Cost of deposits, FC 4Q17 3Q18 4Q18 Cost of deposits Cost of deposits, GEL Cost of deposits, FC 2017 2018 CIB NIM I quarterly CIB NIM I full-year 4% 3.5% 3% 3.4% 3.2% 5% 3.4% 3.3% 4% 2% 3% 1% 2% 0% 1% 4Q17 3Q18 4Q18 2017 2018 BANK OF GEORGIA 32#33BUILDING BLOCKS TO BECOME THE FINANCIAL SERVICES HUB Wealth Management Strong international presence: Israel (since 2008), UK (2010), Hungary (2012), Turkey (2013) and Cyprus (2017) AUM of GEL 2,272 million, up 22% y-o-y Diversified funding sources: " Georgia 30% Israel 10% UK 4% Germany 2% " Other 54% Wealth Management Vision - Become the regional hub for wealth management offering Invest globally ■ Superior service " " Business friendly environment Favorable tax regime High level of banking secrecy Brand new office in the centre of Tbilisi, since January 2019, dedicated to serving wealth management clients Limassol Tel Aviv " Brokerage & Corporate Advisory The leading brokerage house in the region The only international sub-custodian in the region The leading investment bank in the region Wide product coverage and Exclusive partner of SAXO Bank via While Label structure, that provides highly adaptive trading platform with professional tools, insights and world-class execution Fx Fx CFD Eq SAXO O Eq Fu C Bo BANK Research Sector, macro and fixed income coverage Georgian quarterly macroeconomic update International distribution S&P CAPITAL IQ McGRAW HILL FINANCIAL Sty Bloomberg All you need is love... THOMSON REUTERS During 2018 Galt & Taggart acted as: co-manager of Georgia Capital's inaugural US$ 300mln international bond issuance due in 2024, in March 2018 " lead manager for BSTDB, facilitating a public placement of GEL 75mln local bonds in March and June 2018 lead manager for Georgian Leasing Company's US$ 5mln local public bond issuance due in 2021, in June 2018 lead manager for FMO, facilitating a public placement of GEL 160mln local bonds in July 2018 rating advisor for JSC Microfinance Organization Swiss Capital, facilitating the process of obtaining the Long-Term Issuer Default Rating of 'B-' from Fitch Ratings, in July 2018 rating advisor for Georgian Leasing Company, facilitating the process of obtaining the Long- Term Issuer Default Rating of 'B+' from Fitch Ratings, in November 2018 lead manager of m2 Commercial Assets' US$ 30mln local public bond issuance due in 2021, in December 2018 Corporate advisory platform " Team with sector expertise and international M&A experience Proven track record of more than 30 completed transactions over the past 8 years BANK OF GEORGIA 33#34CONTENT Group Overview Results Discussion • Georgian Macro Overview • Appendices BANK OF GEORGIA 4 10 35 56 34#35GEORGIA AT A GLANCE General Facts Herdam Area: 69,700 sq km Population (2018): 3.7 mln Life expectancy: 73.5 years Official language: Georgian Literacy: 100% Capital: Tbilisi Currency (code): Lari (GEL) Economy Nominal GDP (Geostat) 2018E: GEL 41.2 bln (US$16.3 bln) Real GDP growth rate 2014-2018E: 4.6%, 2.9%, 2.8%, 4.8%, 4.8% Real GDP 2010-2018 annual average growth rate: 4.8% GDP per capita 2018 (PPP) per IMF: US$ 11,600 Annual inflation (e-o-p) 2018: 1.5% External public debt to GDP 2018E: 35.3% BANK OF GEORGIA Hamburg Dusseldorf Leipzig GERMANY Frankfurt POLAND BELARUS CZECH REP. SLOVAKIA UKRAINE Penza KAZA Munich MOLDOVA AUSTRIA LECHENSTEN HUNGARY Elista WICZERLAND SLOVENIA Milan Turin ROMANIA BOSNIA & Genoa CROATIA HERZEG Majkop Nalčk MONAS ce SAN MARINO CAN Grozny YUGOSLAVIA ALBANIA MACEDONIA Salon BULGARIA Black Sea Macha GEORGIA ARMENIA AZERBAUA TURKEY AZER GEORGIA Sovereign Credit Ratings Rating Agency Rating Outlook Affirmed MOODY'S Ba2 Stable September 2018 Fitch Ratings BB- Positive S&P Global BB- Stable August 2018 May 2018 35#36GEORGIA'S KEY ECONOMIC DRIVERS Top performer globally in WB Doing Business over the past 12 years Liberal economic policy Regional logistics and tourism hub Strong FDI Support from international community Electricity transit hub potential Political environment stabilised Liberty Act ensures a credible fiscal and monetary framework: Fiscal deficit/GDP capped at 3%; Government debt/GDP capped at 60% Business friendly environment and low tax regime (attested by favourable international rankings) A natural transport and logistics hub, connecting land-locked energy rich countries in the east and European markets in the west Access to a market of 2.8bn customers without customs duties: Free trade agreements with EU, China, CIS and Turkey, recently signed FTA with Hong Kong. The GSP with USA, Canada, Japan, Norway and Switzerland; FTA with India under consideration Tourism revenues on the rise: tourism inflows stood at 19.7% of GDP in 2018 and total arrivals reached 8.7mln visitors in 2018 (up 9.8% y- o-y), out of which tourist arrivals were up 16.9% y-o-y to 4.8mln visitors. Regional energy transit corridor accounting for 1.6% of the world's oil and gas transit volumes An influx of foreign investors on the back of the economic reforms have boosted productivity and accelerated growth FDI stood at US$ 1.9bln (12.6% of GDP) in 2017, up 21.0% y-o-y FDI averaged 10.0% of GDP in 2007-2017 Georgia and the EU signed an Association Agreement and DCFTA in June 2014 Visa-free travel to the EU is another major success in Georgian foreign policy. Georgian passport holders were granted free entrance to the EU countries from 28 March 2017 Discussions commenced with the USA to drive inward investments and exports Strong political support from NATO, EU, US, UN and member of WTO since 2000; Substantial support from DFIs, the US and EU Developed, stable and competitively priced energy sector Only 20% of hydropower capacity utilized; 150 renewable (HPPS/WPPS/SPPS) energy power plants are in various stages of construction or development Georgia imports natural gas mainly from Azerbaijan Significantly boosted transmission capacity in recent years, a new 400 kV line to Turkey and 500 kV line to Azerbaijan built, other transmission lines to Armenia and Russia upgraded Additional 2,000 MW transmission capacity development in the pipeline, facilitating cross-border electricity trade and energy swaps to Eastern Europe Georgia underscored its commitment to European values by securing a democratic transfer of political power in successive parliamentary, presidential, and local elections and by signing an Association Agreement and free trade agreement with the EU Constitution amendments passed in 2013 to enhance governing responsibility of Parliament and reduce the powers of the Presidency Continued economic relationship with Russia, although economic dependence is relatively low Russia began issuing visas to Georgians in March 2009; Georgia abolished visa requirements for Russians -The Russian side announced to ease visa procedures for Georgians citizens effective December 23, 2015 Direct flights between the two countries resumed in January 2010 Member of WTO since 2000, allowed Russia's access to WTO; In 2013 trade restored with Russia In 2018, Russia accounted for 13.0% of Georgia's exports and 10.3% of imports; just 3.6% of cumulative FDI over 2003-17 BANK OF GEORGIA 36#37GROWTH ORIENTED REFORMS Ease of Doing Business | 2019 Source: WB-IFC Doing Business Report New Zealand 1 Singapore 2 Denmark 3 Georgia Norway USA UK Lithuania Estonia 6799 up from 9th in 2018 UK 7 USA 12 Estonia 15 Georgia 16 Lithuania 21 Economic Freedom Index | 2019 Source: Heritage Foundation Top 8 in Europe region out of 44 countries Czech rep. 23 Latvia 35 Bulgaria 37 Romania Poland Armenia Kazakhstan Azerbaijan 42 46 47 59 60 Hungary Tukey France 71 Italy Russia Ukraine 64 68 71 80 98 147 Latvia Germany Azerbaijan Kazakhstan Russia Poland Czech Rep. Armenia Turkey Ukraine 14 16 19 2452833335 41 43 Global Corruption Barometer | 2017 Germany Georgia Poalnd Czech Rep. Slovak Rep. Latvia Montenegro Bulgaria Turkey Lithuania Armenia Bosnia & Herz. Romania Kazakhstan Russia Ukraine Azerbaijan Moldova Source: Transparency International % admitting having paid a bribe last year Georgia is on a par with EU member states 3% 7% 7% 9% 12% 15% 16% 17% 18% 24% 24% 27% 29% 29% 34% 38% 38% 42% BANK OF GEORGIA Business Bribery Risk | 2018 Sweden Norway 3 UK 7 Singapore Estonia 15 18 USA France Lithuania Georgia Czech rep. Poland Latvia Armenia Bulgaria Azerbaijan Ukraine Russia Kazakhstan Turkey Uzbekistan 27 23313133039 Source: Trace International 36 77% 79 95 105 108 127 130 177 BB 37#38GOVERNMENT'S ONGOING REFORMS 1 Structural Reforms Tax Reform Corporate income tax reform Enhancing easiness of tax compliance Capital Market Reform Boosting stock exchange activities Developing of local bond market Pension Reform Introduction of private pension system PPP Reform Introduction of transparent and efficient PPP framework Public Investment Management Framework Improved efficiency of state projects Deposit Insurance Boosting private savings " Enhancing trust to financial system Accounting Reform Increased transparency and financial accountability Enhanced protection of shareholder rights Association Agreement Agenda 2 3 Promoting Open Governance 4 Improvement of public services offered to the private sector Creation of "Front Office" Application of "Single Window Principle" Involvement of the private sector in legislative process Discussion of draft legislation at an early stage Strict monitoring of implementation of government decisions Creation of a special unit for monitoring purposes BANK OF GEORGIA " " Promoting Transit & Tourism Hub Roads Plan to finish all spinal projects by 2020 - East-West Highway, other supporting infrastructure Rail Baku Tbilisi Kars new railroad line - Railway modernization project Air Tbilisi International Airport 2nd runway to be constructed International Cargo terminal Maritime Anaklia deep water Black Sea port Strategic location Capable of accommodating Panamax type cargo vessels High capacity - up to 100mln tons turnover annually Up to USD 1bln for first phase (out of 9) in Georgia Education Reform General Education Reform Maximizing quality of teaching in secondary schools Fundamental Reform of Higher Education Based on the comprehensive research of the labor market needs Improvement of Vocational Education Increase involvement of the private sector in the professional education 38#39Ukraine BANK OF GEORGIA 2003 2004 2005 2006 2007 2008 DIVERSIFIED RESILIENT ECONOMY Gross domestic product Diversified nominal GDP structure, 9M18 2009 Nominal GDP, US$ mn 2010 2011 Source: Geostat 210 20 16% 12.6% Hotels & restaurants 3.0% Other 10.1% Industry 17.2% 15 11.1% 9.6% 12% Financial interm. 7.2% 4.5% 10 9.4% 6.2% 6.4% 8% 4.6% 4.8% 4.8% 5 5.8% 2.4% 2.9% Healthcare 6.0% 4% 3.4% 2.8% Real estate о -3.7% 0% 7.1% -5 -4% 2012 2013 2014 2015 2016 2017 2018 Comparative real GDP growth rates, % (2010-2018E average) Azerbaijan Russia Bulgaria Czech rep. Latvia Romania Lithuania Poland Estonia Armenia Moldova Real GDP growth, % Public administration 7.4% Agriculture 8.1% Source: IMF, GeoStat 7% 6.5% 12,000 6% Source: IMF, GeoStat 11,600 10,742 5% 4.8% 10,000 4.5% 4.4% 9,2399,63010,043 4% 8,544 3.3% 3.4% 3.5% 8,008 3% 2.7% 3.0% 8,000 7,287 2.2% 2.3% 1.8% 2% 1.4% 6,000 5,791 6,127 6,0276,567 4,945 4,331 1% 4,000 3,4403,784 0% -1% -0.2% 2,000 1,010 1,305 1,6432,000 2,635 3,326. 2,8233,073 3,8444,250 4,3414,438 3,755 3,857 4,047 4,363 Georgia Turkey O Transport & Construction 9.1% commun. 10.6% GDP per capita Nominal GDP per capita, US$ ■GDP per capita, PPP, US$ 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018E 39 Trade 17.0% Source: Geostat#40PRODUCTIVITY AND CAPITAL HAVE BEEN THE MAIN ENGINE OF GROWTH SINCE 2004 Overall contribution of capital, labour, and Total Factor Productivity (TFP) to growth, 2010-2018E TFP growth 1.6% Contributions of capital, labour, and TFP to growth during periods Source: GeoStat, G&T calculation Labor force 0.6% Source: GeoStat, G&T calculation 10% 8% 6% 4% 2% Capital stock 2.7% 0% -2% 2004-07 Real GDP growth projection, 2019 6% 5% 4% 3% 2.7% 2% 1.6% 1% 0.4% 0% Turkey Source: IMF 2.9% 3.0% 3.1% 3.2% 3.3% 3.4% 3.5% 3.6% 2008-09 2010-13 2014-18E ■TFP growth ■Labor force Capital stock Real GDP growth: Georgia, CIS, Eastern EU 8% 4.8% 4.6% 7% 3.8% 6% CIS 5% 4% 3% 2% Eastern 1% Europe 0% -1% -2% -3% Russia Ukraine Lithuania Czech rep. Bulgaria Estonia Latvia Romania Poland Azerbaijan Moldova Georgia Armenia BANK OF GEORGIA Source: IMF, Geostat Georgia 2010 2011 2012 2013 2014 2015 2016 2017 2018E 2019F 2020F 40#41FURTHER JOB CREATION IS ACHIEVABLE Unemployment rate down 0.1ppts y/y to 13.9% in 2017 Average monthly wages and income per household Source: GeoStat Source: Geostat 1,800 20% 500 1,700 400 1,600 15% 1,500 300 1,400 10% 200 1,300 1,200 5% 100 1,100 0 1,000 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Employed, 000' persons Unemployment rate, % Wages, US$ Total income, US$ Share of services in total employment on the rise Source: GeoStat 900 2,000 800 700 1,500 600 500 1,000 400 300 500 200 100 O O 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ■Services (incl. construction) ■ Agriculture ■Manufacturing BANK OF GEORGIA Hired workers accounted for 48.3% in total employment in 2017 Source: GeoStat 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ■Public sector (hired workers) ■Non-public sector (hired workers) 41#4270% 60% 50% 40% 30% 20% 10% 0% 2003 2004 2005 2006 2007 2008 2009 BANK OF GEORGIA Total public debt to GDP, % 2010 2011 LOW PUBLIC DEBT Fiscal deficit 4% 2.0% 2% 3.1% 2.2% 0% 0.4% -2% -1.2% -4% -6% -8% -10% 2003 2004 2005 2006 2007 2008 2009 2010 -1.7% -2.3% -2.8% -3.0% -2.5% -2.9% 2.1% -2.1% -2.7% -2.9% -2.6% 5.6% -6.9% 2011 Fiscal deficit / surplus (IMF program definition) Note: Deficit calculated as net lending / borrowing minus budget lending 2012 2013 2014 2015 2016 2017 Public debt as % of GDP Public debt/GDP capped at 60% 2012 2013 2014 2015 2016 2017 2018 External public debt to GDP, % 2019F º 2020F Source: MOF, Geostat 2018E 140% 70% 120% 60% 100% 50% 80% 40% 60% 30% 40% 20% 20% 10% 0% 0% Russia Breakdown of public debt Source: Ministry of Finance of Georgia Source: Ministry of Finance of Georgia, as of Dec-2018 2019F 2020F Kazakhstan Uzbekistan Turkey Moldova Czech rep. Latvia Lithuania Romania Domestic 21% Multilateral 56% External 79% Bilateral 13% Eurobond 8% Gross government debt/GDP, 2018E 44.8% Georgia Slovakia Poland Armenia Belarus Slovenia Ukraine Hungary Montenegro Croatia Canada Spain Singapore 42 42 Italy Source: IMF, MOF, Geostat External public debt portfolio weighted average interest rate 2.27% Contractual maturity 22 years#43BANK OF GEORGIA 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Turkey Armenia Georgia Belarus Lithuania Russia Hungary Estonia Bulgaria Croatia Expenditures (current + capital), GEL mn - Expenditures (current + capital) as % of GDP Government social expenditure as % of GDP 2015 ■2016E 2017E 2018F 2018 2019F 2020F INVESTING IN INFRASTRUCTURE AND SPENDING LOW ON SOCIAL Expenditures: current vs. capital Budget expenditures Source: Ministry of Finance, GeoStat Source: Ministry of Finance 16,000 50% 100% 14,000 38.3% 34.0% 40% 80% 12,000 30.7% 30.6% 29.4% 30.3% 30.5% 31.0% 30.4% 30.0% 30.5% 30.0% 80.4% 80.0% 81.7% 76.0% 78.1% 80.0% 10,000 30% 60% 72.5% 73.4% 74.2% 73.1% 74.2% 72.6% 8,000 6,000 20% 40% 24.0% 27.5% 26.6% 25.8% 26.9% 25.8% 27.4% 19.6% 20.0% 21.9% 4,000 18.3% 20.0% 10% 20% 2,000 0 0% 0% Source: IME 8% 7% 6% 5% 4% 3% 2% 1% 0% Poland Armenia Turkey Croatia Russia Poland Lithuania 43 Estonia Bulgaria Georgia Hungary Belarus 2009 2010 2011 2012 2013 2014 Current Expenditures Capital Expenditures and net lending Government capital expenditure as % of GDP 2015 ■2016E 2017E 2018F Source: IMF 2015 2016 2017 2018 2019F 2020F#44DIVERSIFIED FOREIGN TRADE Imports of goods and services Exports of goods and services Source: NBG - BOP statistics Source: NBG BOP statistics 8.0 7.1 7.0 7.5 12 6.0 6.1 0.5 10.1 10 9.2 9.3 9.4 5.9 1.1 0.9 8.7 8.5 6.0 5.1 0.4 0.3 8.0 1.7 0.9 3.0 7.5 1.4 1.6 3.9 2.0 0.7 8 3.0 3.1 5.9 6.1 1.3 1.2 13 1.7 1.7 3.6 2.5 2.5 4.0 3.1 3.1 0.5 2.5 0.3 2.4 10 6 5.3 0.2 0.2 0.9 1.1 1.9 1.0 2.0 2.0 1.8 1.5 4.0 4 7.7 7.7 8.3 2.6 3.0 3.0 3.1 3.3 6.3 6.7 7.0 7.4 6.8 1.1 1.3 1.3 1.6 2.0 5.0 5.1 0.0 2 4.3 0 2012 2013 2017 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ■Goods imports, US$ bn ■Services imports, US$ bn Imports, 2018 ■Re-exports, US$ bn ■Services exports, US$ bn Exports, 2018 Source: GeoStat Uzbekistan 2.4% Other 14.0% EU 21.7% Source: GeoStat 1,000 800 Armenia 3.8% Other 15.9% EU 28.8% USA Kazakhstan 2.7% 3.9% Ukraine 5.7% USA 4.8% Ukraine 5.2% Azerbaija n 6.4% China Turkey 5.9% 16.1% Turkey China 6.9% 9.1% Russia 10.3% Armenia / Russia 8.5% 13.0% BANK OF GEORGIA ■Goods exports, Geo-originated, US$ bn Oil imports 600 400 200 Hull 0 Azerbaijan 15.0% -200 -400 2007 2008 2009 2010 2011 2012 2013 2014 2015 Oil imports, US$ mn Source: GeoStat % change, y/y 100% 75% 50% 25% 0% -25% -50% 44#452003 2004 0.0 1.5 2.0 DIVERSIFIED SOURCES OF CAPITAL Strong foreign investor interest 1.0 9.6% 7.1% 8.4% 0.5 2003 2007 2008 2009 FDI, US$ bn 2010 2011 Remittances - steady source of external funding 2012 2013 2014 2015 2016 2017 9M18 Tourist arrivals and revenues on the rise Source: Geostat Source: NBG, Geostat 25% 3.5 25% 19.7% 3.0 17.9% 20% 20% 17.2% 2.5 14.7% 15.1% 13.4% 12.3% 15% 15% 11.8% 12.6% 2.0 10.7% 0.8% 7.3% 11.0% 8.3% 8.9% 1.5 6.2% 6.5% 10% 10.9% 6.6% 10% 5.7% 7.8% 1.0 3.7% 3.4% 3.8% 4.0% 3.8% 3.5%* 4.4% 6.3% 5% 5% 0.5 0% 0.0 0% FDI as % of GDP Source: NBG, Geostat 9.7% 1.6 8.5% 9.0% 8.8% 9.2% 9.1% 7% 8.7% 10% 8.4% 1.4 7.8% 7.8% 7.7% 8.0% 1.6 6% 7.1% 1.5 1.4 1.2 6.3% 1.3 1.4 8% 1.3 1.0 4.9% 5.1% 1.2 1.1 1.1 0.8 1.0 0.9 0.8 0.6 6% 4% 0.4 0.6 2% 0.2 0.4 0.2 0.3 0.0 do olo olo olo o 5% 4% 0% BANK OF GEORGIA 2005 2006 2007 2008 2009 Remittances, US$ bn 2010 2011 2012 2013 2014 2015 2016 2017 2018 Remittances as % of GDP 3% 1.7% 1.8% 2% 1% 0% 2003 2003 2004 2005 2006 Tourism revenues, US$ mn Public external borrowing for capex, % of GDP Source: MOF, Geostat 1.1% 1.3% 1.0% 2007 2008 2009 2010 6.1% 5.6% 5.6% 4.4% Tourism revenues as % of GDP 2.6% 2.2% 3.4% 3.3% 3.2% 3.3% ill 3.5% 2011 2012 2013 2016 2017 2018 45#46CURRENT ACCOUNT DEFICIT SUPPORTED BY FDI Current account balance (% of nominal GDP) 30% Goods, net 15.3% I Services, net 16.5% Income, net Transfers, net CA deficit Source: NBG, Geostat net FDI 20% 8.3% 9.4% 8.5% 11.1% 8.5% 9.6% 10.8% 6.3% 6.1% 6.8% 8.1% 4.6% 5.6% 6.0% 10% 0% -10% -7.0% -5.9% -6.5% -9.7% -20% -11.1% -10.6% -10.3% -8.8% -12.8% -11.9% -15.2% -10.8% -12.6% -13.1% -19.8% -30% -22.0% -40% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 9M18 FDI and capital goods import Source: Geostat 20% 18% 17.2% 15.1% 3.5 16% 3.0 14% 12.3% 12.6% 12% 11.0% 11. 11.8% 10.9% 2.5 9.6% 10% 8.4% 7.1% 7.3% 7.8%8.4% 9.3% 2.0 8% 6.2% 7.0% 1.5 6% 7.9%8.2%7.9% 4% 7.6% 6.5% 7.7% 8.5% 9.1% 8.3% 8.2% 1.0 5.2% 5.6%5.8% 5.9%6.0% 6.3% 2% 0.5 0.2 0% 0.0 FDI to GDP, % BANK OF GEORGIA 2008 Capital goods imports to GDP, % 2003 Building international reserves, US$ bn 0.4 0.5 0.9 2.3 2.1 1.4 1.5 2.8 2.9 2.8 2.7 2.5 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: NBG 3.3 3.0 2.8 2016 2017 2018 46 46#47140 120 80 3 8 88 89 9 100 20 Jan-13 May-13 Jul-13 Oct-13 Jan-14 Apr-14 BANK OF GEORGIA 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3% INFLATION TARGETING SINCE 2009 Annual Inflation Jan-13 May-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Headline inflation. Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 World commodity prices Energy Source: Geostat 9% 3.5% 8% 3.0% 7% 2.5% 6% 5% 2.0% 4% 1.5% 1.5% 3% 1.0% 2% 0.5% 1% 0% 0.0% 0.9% -1% -0.5% -2% -1.0% -3% -1.5% Jul-18 Oct-18 Dec-18 -2.0% Core (non-food, non-energy) Non-energy Source: World Bank Note: Jan2010=100 7% 140 6% 5% 120 4% 100 3% 80 2% 60 1% 0% 40 -1% 20 -2% Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Dec-18 Jan-13 May-13 Monthly inflation Source: Geostat 3.5% 3.0% 2.5% 2.0% Мами 1.5% 0.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% Jan-13 May-13 Jul-13 Oct-13 Jan-14 Apr-14 Apr-14 Jul-14 Oct-14 71-458 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Dec-18 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Average inflation Source: Geostat 7% 6% 5% 4% 3% 2.6% 2% 1% 0% -1% Jan-1 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Dec-18 47 -2%#489% %8 7% 6% 5% 4% 3% 2% 1% 0% Jan-14 Apr-14 Jun-14 Sep-14 BANK OF GEORGIA Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Gross international reserves, US$ bn Monetary policy rate INTERNATIONAL RESERVES SUFFICIENT TO FINANCE MORE THAN 3 MONTHS OF IMPORTS -Net foreign assets, US$ bn International reserves Source: NBG 250 US$ sale 3.5 Central Bank's interventions NBG purchased US$ 197.5mn in 2018 Source: NBG 200 3.0 150 120 100 2.5 100 60 40 40 27 60 50 2.0 о 120 40 1.5 -50 -20-20 -20 1.0 -100 US$ purchase -40 -30 -25 0.5 -150 0.0 -200 Jun-15 Sep-15 Dec-15 Mar-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Sep-18 Dec-18 Jan-140 Apr-14 -63 -70 -65 -120 -140 Jul-14 Oct-14 Jan-15 Apr-15 Jun-15 Sep-15 Dec-15 Mar-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Sep-18 Dec-18 Source: NBG 80% 9% 8% 75% 7% 70% 6% 5% 65% 4% 60% 3% 2% 55% 1% 50% 0% Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Jan-14 Apr-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Loan dollarization Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Deposit dollarization Jun-18 INBG net interventions, US$ mn Dollarisation Sep-18 48 Dec-18 Source: NBG 80% 75% 70% 65% 60% 55% 50%#4970% 50% 30% 10% -10% -30% Jan-03 Sep-03 Source: NBG 3.5 1.4 1.3 1.3 3.0 1.1 1.2 1.2 1.2 1.3 1.4 1.3 1.6 160 12 1.4 1.2 1.2 1.2 150 2.5 7.0 2.8 0.9 2.9 2.8 1.0 1.2 2.7 140 2.5 3.3 1.0 2.0 2.3 3.0 130 2.1 2.8 0.8 1.5 120 1.5 0.6 1.0 1.4 110 0.4 0.9 100 0.5 0.2 0.4 0.5 0.2 06 0.0 0.0 FLOATING EXCHANGE RATE - POLICY PRIORITY FX reserves Nominal and Real effective exchange rate (Jan2003-100) Official FX reserves, US$ bn 2010 2011 2012 2013 2014 2015 2016 2017 M2 and annual inflation May-04 Dec-04 Aug-05 Apr-06 Dec-06 Aug-07 Apr-08 Dec-08 Aug-09 Apr-10 Dec-10 Aug-11 Apr-12 Dec-12 BANK OF GEORGIA -M2, % change, y/y (LHS) -M2 multiplier 2018 Source: NBG 80% 15% 60% 12% 40% 9% 20% 6% 0% 3% -20% 0% -3% -40% -6% -60% Annual inflation, eop (RHS) Aug-13 3 Apr- Apr-14 Dec-14 Aug-15 Apr-16 Dec-16 Aug-17 Apr-18 Dec-18 Jan-03 Sep-03 May-04 Dec-04 Aug-05 Apr-06 Dec-08 -M2, % change, y/y (LHS) Jan-03 Sep-03 May-04 Dec-04 Aug-05 Apr-06 Dec-06 Aug-07 Apr-08 Dec-08 Aug-09 Aug-09 Real effective exchange rate Apr-10 Dec-10 Aug-11 Apr-12 Dec-12 Aug-13 Apr-14 Dec-14 Aug-15 Apr-16 M2 and USD/GEL Aug-09 Apr-10 Dec-10 Aug-11 Apr-12 Apr-12 Dec-12 Aug-13 Aug-15 Apr-14 Apr-14 depreciation appreciation Dec-14 Aug-15 Aug-15 Apr-16 Dec-16 Aug-17 GEL/USD, % change (RHS) Dec-16 Nominal effective exchange rate Source: NBG 40% 30% 20% 10% 0% -10% -20% Apr-18 Dec-18 49 49 -30% Source: NBG 160 150 140 130 120 110 100 90 Aug-17 Apr-18 Dec-18#50GROWING AND WELL-CAPITALISED BANKING SECTOR Summary Prudent regulation and oversight ensuring financial stability Demonstrated strong resilience towards both domestic and external shocks without single bank going bankrupt No nationalization of the banks and no government ownership since 1994 Resilient to different shocks to the economy, room for healthy growth with retail loans estimated at 35% of GDP and total loans at 64% of GDP 25 403005050 Banking sector assets, loans and deposits Source: NBG 25.4% CAGR 39.7 34.6 30.1 26.6 25.2 22.3 20.6 17.3 18.9 16.0 14.4 15 12.7 13.0 10.6 8.9 10.5 10 7.2 8.3 7.7 8.7 1.3 2.5 1.7 4.2 4.6 6.0 5.2 6.3 0.8 0.9 0.7 1.0 1.7 2.7 1.3 2.1 3.2 3.6 4.0 5.5 6.7 7.6 9.7 11.6 14.3 17.0 19.8 23.0 20 Source: National Bank of Georgia, GeoStat Banking Sector loans to GDP, 2017 Armenia 48.8% Czech Rep. 51.6% Bulgaria Russia 51.8% 52.7% Poland 52.7% Bosnia & Herz. 54.1% Croatia 57.7% Georgia 58.9% Slovakia 59.8% Latvia 60.2% Israel 66.0% Turkey 66.5% BANK OF GEORGIA Assets, GEL bn I Loans, GEL bn Deposits, GEL bn Non-performing loans, Latest-2018 Source: IMF, WB, NBG Source: IMF, NBG Czech Rep. 1.9% Georgia Lithuania 2.7% 2.7% Hungary 2.9% Turkey 3.0% Poland Belarus 4.0% 4.1% Romania Latvia Armenia Bulgaria Kazakhstan Bosnia & Herz. Russia Croatia Portugal 5.6% 6.0% 6.3% 8.7% 8.8% 9.4% 10.7% 11.1% 11.7% 50#51BANK OF GEORGIA 50 Jan-07 May-07 Sep-07 100 150 Source: NBG, Geostat GROWING ECONOMY SUPPORTS HEALTHY CREDIT GROWTH Banking sector corporate & retail loans to GDP Source: NBG, Geostat Source: NBG Mortgage loans 60% 50% 40% 30% 20% 10% 28% 25% 21% 18% 60% 35% 50% བར འཁོར ཆེན པའི མེད 5,444 72,030 54,538 3,838 40% 32,870 3,099 41,753 37,472 30% 79.0% 13% 9% 11% 11% 13% 14% 2,156 29,840 20% 80.1% 6% 4% 0% 3% 3% 10% 14% 17% 18% 17% 18% 18% 18% 20% 22% 26% 27%27%29% 91.7% 28,431 33,331 10% 87.2% 39,160 24,698 21.0% 19.9% 0% 12.8% 8.3% 9,041 8,422 2003 2004 2005 2006 2007 2008 2009 2010 2011 2015 2016 2017 2018 2015 Retail loans to GDP Corporate loans to GDP FX-denominated mortgage loans, share in total GEL-denominated mortgage loans, share in total • Total mortgage loans, GEL mn 2016 Number of mortgage loans in FX ■Number of mortgage loans in GEL • Total number of mortgage loans 2017 2018 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Real estate price index Inflation adjusted real estate price index (2010=100, GEL) Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Dec-17 Apr-18 Aug-18 Dec-18 51#52BANK OF GEORGIA Georgia Azerbaijan Armenia Russia End-2017 ■ End-2018 Euro Armenia Inflation remains low in Georgia Source: National Statistics Offices FLEXIBLE FX REGIME SUPPORTS TO MACRO STABILITY Source: Bloomberg Currency weakening vs. US$ Note: US$ per unit of national currency, period 1-Aug-2014- 30-Jan-2019 Moldova 25% 30% 20.3% 20% 25% 20% 15% 9.8% 15% 10% 5.3% 5.6% 4.3% 10% 5% 6.00% 1.7% 1.8% 1.5% 5% 0% 0% Kazakhstan Belarus Ukraine Turkey Armenia Georgia Russia Georgia 59.2% 52.0% 52.1% 53.9% 55.5% 45.3% 34.7% 14.5% 16.3% 18.7% Russia Belarus Kazakhstan Azerbaijan Ukraine Turkey Monetary policy rate low vs. peers End-2017 End-2018 Source: Central banks 7.00% 7.75% 9.25% 9.75% 10.00% Kazakhstan Azerbaijan 52 42 Belarus Turkey ☐ Ukraine 24.00% 18.00%#53BANK OF GEORGIA -100 -200 Jan-16 Feb-16 Mar-16 0 400 300 200 100 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 I Exports, US$ mn 500 Jan- Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 % change y/y May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 0 Jan-16 400 350 300 250 200 150 100 50 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Tourism revenues, US$ mn % change y/y Exports up 22.9% y/y in 2018 RECENT TREND - TOURIST ARRIVALS, EXPORTS AND REMITTANCES UP Tourism revenues up 18.4% y/y in 2018 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Source: NBG 50% 160 45% 40% 120 35% 30% 80 25% 20% 40 15% 10% 0 5% 0% -40 Source: Geostat 60% 50% 50% 40% 40% 30% 30% 18% 20% 16%16% 20% 7% 10% %8 10% 10% 10% 10% 0% 0% -10% -10% -11% -20% -20% -22% -3% -30% -25% Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Aug-16 Remittances, US$ mn Remittances up 14.3% y/y in 2018 Source: NBG 80% 60% 40% 20% 0% May-17 Jul- Aug-17 Sep-17 Oct-17 Nov-17 Trade deficit up 10.7% y/y in 2018 01% 12% 9% 3% -3% 1% -7% -1% -1% -14% %+7- Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Jan-18 Feb-18 Apr-18 Jun-18 Total remittances, % change y/y Source: Geostat 50% 40% 40% 33% 30% 22% 21% 20% 17% 14% 5% 20% 4% 6% 10% 0% -10% Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 53 -3% -119% -20% -30% Jul-18 Sep-18 Oct-18 Dec-18 -20%#54GEORGIA ABSORBS NEGATIVE SHOCK FROM TURKEY Summary Diversified economic linkages serve Georgia well, minimizing negative impact from Turkey Despite reduced earnings from Turkey since Aug-18, Georgia's overall earnings from exports, remittances and tourism from other countries continued strong growth Georgia's exposure to Turkey, 2018 GEL's real exchange rate vs. TRY and GEL's REER 180% 180% Turkey Other countries GEL appreciated by 14.0% y/y in real terms vs TRY GEL'S REER appreciation was 3.4% y/y in December 2018, 160% 160% External flows as GEL remains competitive toward US$ % change US$ mn y/y Share in total, % % change US$ mn y/y 140% 140% Exports Tourism 232.7 7.4% 6.9% 3,129.4 24.2% 120% 120% 421.8 9.1% 13.2% 2,780.7 20.0% 100% 100% Remittances 105.6 -3.4% 6.7% 1,474.9 15.8% 80% 80% Import 1,470.1 7.0% 16.1% 7,652.2 16.6% Aug-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Oct-14 Apr-15 Oct-15 Apr-16 Nov-16 May-17 Nov-17 May-18 Dec-18 Trade deficit 1,237.4 6.9% 21.5% 4,522.9 11.8% GEL/TRY RER (Jan-2010-100) Source: Geostat, NBG, GNTA, G&T BANK OF GEORGIA GEL'S REER (Jan-2010=100) Source: NBG Note: Index growth means GEL's appreciation and decline means GEL's depreciation 54 54#55CONTENT Group Overview Results Discussion 4 10 • ■ Georgian Macro Overview 35 • Appendices 56 BANK OF GEORGIA 55#56BANK OF GEORGIA GROUP BOARD OF DIRECTORS Robust Corporate Governance based on UK Corporate Governance Code Neil Janin, Independent Non-Executive Chairman Experience: formerly Director at McKinsey & Company in Paris; formerly co-chairman of the commission of the French Institute of Directors (IFA); formerly Chase Manhattan Bank in New York and Paris Hanna Loikkanen, Senior Independent Non-Executive Director Experience: currently advisor to East Capital Private Equity AB; Non-Executive Director of PJSC Rosbank; formerly: Senior executive at East Capital, FIM Group Russia, Nordea Finance, SEB Tamaz Georgadze, Independent Non-Executive Director Experience: Executive Director and founder of Raisin GmbH (formerly Saving Global GmbH); formerly: Partner at McKinsey & Company in Berlin, aide to President of Georgia Archil Gachechiladze, Chief Executive Officer Experience: with the Group since 2009; originally joined as Deputy CEO, Corporate Banking; formerly: CEO of Georgian Global Utilities. Over 17 years' experience in the financial services Al Breach, Independent Non-Executive Director Experience: Director of Gemsstock Ltd, The Browser and Furka Holdings AG, and advisor to East Capital; formerly: Head of Research, Strategist & Economist at UBS Russia and CIS, economist at Goldman Sachs Jonathan Muir, Independent Non-Executive Director Experience: CEO of LetterOne Holdings SA and of Letter One Investment Holdings; formerly: CFO and Vice President of Finance and Control of TNK-BP, Partner at Ernst & Young Cecil Quillen, Independent Non-Executive Director Experience: Partner at Linklaters LLP with nearly 29 years of experience in working on a broad spectrum of securities and finance matters Andreas Wolf, Independent Non-Executive Director Experience: Head of Strategy and Business Development for MHB-Bank AG in Germany and an advisor to Raisin, a European deposit brokerage marketplace; formerly: Partner at McKinsey & Company in Frankfurt Véronique McCarroll, Independent Non-Executive Director Experience: 30 years' experience in Financial Services; formerly: Executive Director at Crédit Agricole CIB, Partner at McKinsey & Company, Oliver Wyman and Andersen/ Ernst & Young BANK OF GEORGIA 99 56#57HIGHLY EXPERIENCED MANAGEMENT TEAM Senior Executive Compensation Policy applies to top executives and envisages long-term deferred and discretionary awards of securities and no cash bonuses to be paid to such executives Archil Gachechiladze, Chief Executive Officer With the Group since 2009. Previously, CEO of Georgian Global Utilities. Held various positions with the Group, such as Deputy CEO, Corporate Banking, Deputy CEO, Investment Management, CFO of BGEO Group, Deputy CEO, Corporate Investment Banking. More than 17 year of experience of senior roles at TBC Bank, Lehman Brothers Private Equity, Salford Equity Partners, KPMG, World Bank. Holds an MBA from Cornell University. Levan Kulijanishvili, Deputy CEO, Operations With the Group since 1997. Joined as a Junior Financial Analyst of the Bank. Held various senior positions, including Deputy CEO in charge of finance, Head of Internal Audit, Head of Financial Monitoring, Head of Strategy and Planning, and Head of the Financial Analysis. Holds an MBA from Grenoble Graduate School of Business. David Tsiklauri, Chief Financial Officer Joined the Group as Deputy CEO in charge of Corporate Investment Banking in 2017 from TBC, where he was a Deputy CEO in charge of Corporate Banking since 2014. Before joining TBC Bank, David served as the Vice President of the Capital Markets and Treasury Solutions team at Deutsche Bank. Holds an MBA from London Business School. George Chiladze, Deputy CEO, Chief Risk Officer With the Group since 2008. Joined as a Deputy CEO in charge of finance at the Bank. Left the Group in 2011 and rejoined in 2013 as Deputy CEO, Chief Risk Officer. Prior to rejoining the Group, he was Deputy CEO at the Partnership Fund. Prior to returning to Georgia in 2003, he worked at the programme trading desk at Bear Stearns in New York City. Holds a PhD in physics from Johns Hopkins University in Baltimore, Maryland. BANK OF GEORGIA Mikheil Gomarteli, Deputy CEO, Emerging and Mass Retail Banking With the Group since 1997. Mikheil is a textbook professional growth story made possible in our Group - he developed his way from selling debit cards door-to-door to successfully leading our Retail Banking franchise for over ten years now. Holds an undergraduate degree in Economics from Tbilisi State University. Ramaz Kukuladze, Deputy CEO, SOLO and SME Banking With the Group since 2006. Joined as Deputy CEO, Corporate Banking. Left the Group in 2009 and rejoined the Group in February 2017. Prior to rejoining the Group, Ramaz held the role of Chief Commercial Officer and Deputy CEO at Bank Republic since 2013. Holds an MBA from IE Business School. Vasil Khodeli, Deputy CEO, Corporate Investment Banking With the Group since 1998. Previously served as Head of Corporate Banking of the Bank since 2004. He has more than 20 years of banking experience and has held various roles with the Group. Holds an MBA from Grenoble Business School. Vakhtang Bobokhidze, Deputy CEO, Information Technologies With the Group since 2005. Joined as Quality Control Manager. Left the Group in 2010 and rejoined the Group in December 2010. Prior to being appointed as Deputy CEO, served as Head of IT Department since 2016. Holds an MBA from Tbilisi State University. 57 40#58BANK OF GEORGIA GROUP INCOME STATEMENT Bank of Georgia Group Consolidated GEL thousands, unless otherwise noted 4Q18 4Q17 Change y-o-y 3Q18 Change 9-0-9 4Q18 4Q17 Banking Business Change y-o-y 3Q18 Change q-o-q 4Q18 4Q17 Discontinued Operations Change y-o-y Interest income Interest expense Net interest income Fee and commission income. Fee and commission expense Net fee and commission income Net foreign currency gain Net other income Revenue 345,760 310,589 (158,322) (127,091) 187,438 183,498 62,350 53,290 (21,006) (16,807) 25.0% 41,344 36,483 13.3% 53,358 28,139 89.6% (expense) (9,073) 12,708 Salaries and other employee benefits Administrative expenses Other operating expenses Depreciation and amortisation Operating expenses (100,857) Profit from associates 318 Operating income before cost of risk 172,528 273,067 260,828 (58,331) (55,144) (30,010) (31,760) (11,365) (10,514) (1,151) (1,194) (98,612) 255 162,471 Expected credit loss/ impairment charge on loans to customers (25,783) (41,911) 2.3% 24.7% 6.2% -38.5% 11.3% 337,766 2.4% 24.6% (152,431) 3.9% 2.1% 185,335 1.1% 17.0% 60,413 3.2% 0.4% 4.7% 44.9% NMF 7,437 NMF 4.7% 269,080 1.5% 5.8% (54,107) 7.8% -5.5% (30,759) -2.4% 8.1% (11,162) 1.8% -3.6% (1,109) 3.8% (97,137) 3.8% 326 -2.5% 172,269 0.2% (43,505) -40.7% (20,932) 39,481 36,827 345,760 312,950 10.5% 337,766 2.4% (158,322) (129,826) 21.9% (152,431) 3.9% 187,438 183,124 2.4% 185,335 62,350 53,739 16.0% (21,006) (17,001) 23.6% 41,344 36,738 12.5% 53,358 27,464 (9,073) 12,986 273,067 260.312 1.1% 60,413 3.2% (20,932) 0.4% 39,481 4.7% 94.3% 36,827 44.9% NMF 7,437 NMF 4.9% 269,080 1.5% (58,331) (55,789) 4.6% (54,107) 7.8% (30,010) (32,245) -6.9% (30,759) (11,365) (10,514) (1,151) (1,194) (100,857) (99,742) 318 255 172,528 160,825 (25,783) (41,911) -2.4% Eliminations 3Q18 Change q-o-q 4Q18 4Q17 3Q18 (2,361) 2,735 374 (449) 194 (255) 675 (278) 516 645 485 8.1% (11,162) -3.6% 1.1% 24.7% 1.8% (1,109) 3.8% (97,137) 3.8% 326 -2.5% 7.3% 172,269 0.2% 1,130 1,646 -38.5% (43,505) -40.7% Expected credit loss/ impairment charge on finance lease receivables 514 492 4.5% (426) NMF 514 492 4.5% (426) NMF Other expected credit loss/ impairment charge on other assets and provisions (15,509) (1,009) Income tax expense Cost of risk Profit before non-recurring items and income tax Net non-recurring items Profit before income tax Profit from continuing operations Profit from discontinued operations Profit Attributable to: (40,778) 131,750 (6,586) 125,164 (10,348) 114,816 (42,428) 120,043 NMF -3.9% 9.8% (4,176) NMF (48,107) -15.2% 124,162 6.1% 114,816 (213) 119,830 (11,050) 108,780 10,029 118,809 NMF (3,747) 75.8% 4.5% -6.4% 5.5% NMF -3.4% 120,415 3.9% (9,316) 11.1% 111,099 3.3% (15,509) (1,009) NMF (4,176) NMF (40,778) (42,428) -3.9% (48,107) -15.2% 131,750 118,397 11.3% 124,162 6.1% (6,586) (213) NMF (3,747) 125,164 118,184 5.9% 120,415 (10,348) (11,050) -6.4% (9,316) 11.1% 114,816 107,134 7.2% 111,099 1,646 75.8% 3.9% 1,646 3.3% 1,646 11,675 NMF (1,646) 111,099 3.3% 114,816 107,134 7.2% 111,099 3.3% 11,675 NMF - shareholders of the Group - non-controlling interests 114,240 576 113,729 5,080 0.4% -88.7% 110,651 448 3.2% 28.6% 114,240 576 106,687 447 7.1% 28.9% 110,651 448 3.2% 7,042 NMF 28.6% 4,633 NMF Profit from continuing operations attributable to: - shareholders of the Group 114,240 - non-controlling interests 576 108,333 447 5.5% 28.9% 110,651 3.2% 448 28.6% 114,240 576 106,687 447 7.1% 28.9% 110,651 3.2% 1,646 448 28.6% Profit from discontinued operations attributable to: - shareholders of the Group 5,396 NMF - non-controlling interests 4,633 NMF 7,042 NMF (1,646) 4,633 NMF Earnings per share (basic) 2.40 3.05 -21.3% earnings per share from continuing operations 2.40 2.91 - earnings per share from discontinued operations 0.14 -17.5% NMF 2.32 3.4% 2.32 3.4% Earnings per share (diluted) 2.40 2.90 - earnings per share from continuing operations - earnings per share from discontinued operations 2.40 2.77 0.13 -17.2% -13.4% NMF 2.32 3.4% 2.32 3.4% BANK OF GEORGIA 58#59BANK OF GEORGIA GROUP INCOME STATEMENT Bank of Georgia Group Consolidated Banking Business Discontinued Operations Change GEL thousands, unless otherwise noted 2018 2017 2018 2017 y-o-y Change y-o-y 2018 2017 Interest income 1,322,297 1,131,914 16.8% Interest expense Net interest income Fee and commission income Fee and commission expense Net fee and commission income (580,544) 741,753 (459,379) 26.4% 1,327,085 (587,481) 1,140,292 16.40% (468,192) 25.50% 672,535 10.3% 739,604 672,100 10.0% 228,769 190,392 20.2% 229,670 192,499 19.3% (76,107) (60,342) 26.1% (76,488) (61,025) 25.3% 152,662 130,050 17.4% 153,182 131,474 16.5% Net foreign currency gain 128,762 79,106 62.8% 129,437 86,060 50.4% Net other income 7,262 18,645 -61.1% 7,815 19,701 -60.3% Revenue 1,030,439 900,336 14.5% 1,030,038 909,335 13.3% Salaries and other employee benefits (214,761) (195,994) 9.6% (215,816) (198,213) 8.9% Administrative expenses (112,654) (98,372) 14.5% (113,264) (100,291) 12.9% Eliminations Change 2018 2017 y-o-y Change y-o-y (4,788) 6,937 (8,378) 8,813 -42.9% -21.3% 2,149 435 NMF (901) (2,107) -57.2% 381 683 -44.2% (520) (1,424) -63.5% (675) (6,954) -90.3% (553) (1,056) -47.6% 401 (8,999) NMF 1,055 2,219 -52.5% 610 1,919 -68.2% Depreciation and amortisation (45,442) (40,974) 10.9% (45,442) (40,974) 10.9% Other operating expenses (3,995) (3,458) 15.5% Operating expenses (376,852) (338,798) 11.2% Profit from associates Operating income before cost of risk 1,339 654,926 Expected credit loss/ impairment charge on loans to customers (139,499) 1,311 562,849 (155,210) 2.1% 16.4% -10.1% (3,995) (378,517) 1,339 652,860 (139,499) (3,458) 15.5% (342,936) 10.4% 1,665 4,138 -59.8% 1,311 567,710 (155,210) 2.1% 15.0% 2,066 (4,861) NMF -10.1% Expected credit loss/ impairment charge on finance lease receivables (164) (496) -66.9% (164) (496) -66.9% Other expected credit loss/impairment charge on other assets and provisions (20,562) (11,590) 77.4% (20,562) (11,590) 77.4% Cost of risk (160,225) (167,296) -4.2% (160,225) (167,296) -4.2% Profit before non-recurring items and income tax 494,701 395,553 25.1% 492,635 400,414 23.0% 2,066 (4,861) NMF Net non-recurring items (57,156) (4,300) NMF (57,328) (4,300) NMF 172 Profit before income tax 437,545 391,253 11.8% 435,307 396,114 9.9% 2,238 (4,861) NMF Income tax expense Profit from continuing operations Profit from discontinued operations Profit Attributable to: (56,665) (26,592) 113.1% (56,665) (26,592) 113.1% 380,880 364,661 4.4% 378,642 369,522 2.5% 2,238 (4,861) NMF 107,898 98,788 9.2% 110,136 93,927 17.3% (2,238) 4,861 NMF 488,778 463,449 5.5% 378,642 369,522 2.5% 110,136 93,927 17.3% - shareholders of the Group - non-controlling interests 468,996 437,615 19,782 25,834 7.2% -23.4% 377,075 1,567 367,832 1,690 2.5% 91,921 69,783 31.7% -7.3% 18,215 24,144 -24.6% Profit from continuing operations attributable to: - shareholders of the Group 379,313 - non-controlling interests 1,567 362,971 1,690 4.5% -7.3% 377,075 1,567 367,832 2.5% 2,238 (4,861) NMF 1,690 -7.3% Profit from discontinued operations attributable to: - shareholders of the Group 89,683 74,644 20.1% - non-controlling interests 18,215 24,144 -24.6% 91,921 69,783 31.7% (2,238) 4,861 NMF 18,215 24,144 -24.6% Earnings per share (basic) 10.78 11.61 -7.1% - earnings per share from continuing operations 8.72 9.63 -9.4% - earnings per share from discontinued operations 2.06 1.98 4.0% Earnings per share (diluted) 10.71 11.07 -3.3% -earnings per share from continuing operations - earnings per share from discontinued operations 8.66 9.18 -5.7% 2.05 1.89 8.5% BANK OF GEORGIA 59#60BANK OF GEORGIA GROUP BALANCE SHEET Bank of Georgia Group Consolidated Banking Business Discontinued Operations Eliminations GEL thousands, unless otherwise noted Dec-18 Dec-17 Change y-o-y Sep-18 Change 9-0-9 Dec-18 Dec-17 Change y-o-y Sep-18 Change 9-0-9 Dec-18 Dec-17 Change y-o-y Sep-18 Change 9-0-9 Dec-18 Dec-17 Sep-18 Cash and cash equivalents Amounts due from credit institutions Investment securities Loans to customers and finance lease receivables Accounts receivable and other loans Insurance premiums receivable Prepayments Inventories. Investment property Property and equipment Goodwill Intangible assets Income tax assets 1,215,799 1,582,435 -23.2% 1,237,867 -1.8% 1,305,216 1,225,947 6.5% 1,398,061 -6.6% 2,019,017 1,564,869 29.0% 2,060,880 -2.0% 9,397,747 7,690,450 22.2% 8,762,413 2,849 38,944 -92.7% 30,573 NMF 44,294 149,558 -70.4% 13,292 100,194 -86.7% 151,446 353,565 -57.2% 344,059 988,436 -65.2% 33,351 7.3% 1,215,799 1,516,401 -19.8% 1,237,867 -1.8% 1,305,216 1,216,349 7.3% 1,398,061 -6.6% 2,019,017 1,613,759 25.1% 2,060,880 -2.0% 9,397,747 7,741,420 374,301 NMF 38,141 NMF 33,059 NMF 3,256 -12.5% 2,849 3,572 21.4% 8,762,413 -20.2% 3,256 7.3% -12.5% 35,446 NMF 30,854 NMF (308,267) (28,543) (81,949) (50,970) (74) (281) 48,444 18,598 -8.6% -28.5% 216,715 -30.1% 315,980 8.9% 83,366 19,451 Other assets 126,008 55,276 -39.7% 60,980 2,293 188,732 Assets held for sale 42,408 33,351 36.7% 85,247 -2.2% 748.3% 28,237 -31.1% -33.2% 105,883 19.0% NMF NMF 0.0% 44,294 61,501 -28.0% 13,292 20,086 -33.8% 151,446 202,533 -25.2% 344,059 322,925 6.5% 33,351 33,351 0.0% 83,366 55,525 50.1% 19,451 919 NMF 126,008 119,337 5.6% 42,408 NMF 48,444 18,598 -28.5% 216,715 -30.1% -8.6% 88,057 NMF 80,108 NMF 155,367 NMF (4,335) 315,980 33,351 85,247 28,237 -31.1% 105,883 19.0% 8.9% 661,176 NMF 4,335 0.0% 21,925 NMF -2.2% 5,455 NMF 1,374 NMF 73,468 NMF (4,073) NMF Assets of disposal group held for sale 1,136,417 NMF 1,165,182 NMF (28,765) Total assets 14,798,303 15,168,669 Client deposits and notes Amounts due to credit institutions Debt securities issued -2.4% 14,314,932 8,133,853 6,712,482 21.2% 7,932,536 2,994,879 3,155,839 -5.1% 3,006,739 1,730,414 1,709,152 3.4% 2.5% Accruals and deferred income 47,063 132,669 1.2% 1,578,532 -64.5% 35,977 -0.4% 9.6% 30.8% 14,798,303 12,907,678 8,133,853 7,078,058 2,994,879 2,778,338 1,730,414 1,386,412 47,063 42,207 14.6% 14,314,932 14.9% 7,932,536 7.8% 3,006,739 24.8% 1,578,532 11.5% 3.4% 2.5% -0.4% 2,763,913 NMF (502,922) (365,576) 377,501 NMF 9.6% 35,977 30.8% 357,442 NMF (34,702) 90,462 NMF Insurance contracts liabilities 46,402 Income tax liabilities Other liabilities 28,855 64,966 20,959 Liabilities of disposal group held for sale 142,133 516,663 Total liabilities Share capital Additional paid-in capital Treasury shares Other reserves Retained earnings 1,618 480,555 (51) 30,515 1,277,732 13,000,030 12,436,299 1,151 106,086 Reserves of disposal group held for sale (66) 122,082 2,180,415 10,934 NMF 37.7% -54.3% NMF 4.5% 12,644,984 40.6% 1,618 NMF 464,960 -22.7% (44) -75.0% 34,283 -41.4% 1,161,983 46,402 NMF 38,705 -25.4% 52,495 23.8% 28,855 64,966 20,100 43.6% 49,861 30.3% 38,705 -25.4% 52,495 23.8% 859 NMF 92,553 NMF 619,026 NMF 2.8% 0.0% 3.4% 15.9% -11.0% 10.0% 13,000,030 11,354,976 1,618 1,151 480,555 (51) (66) 30,515 (74,046) 1,277,732 1,618,775 14.5% 12,644,984 40.6% NMF -22.7% NMF -21.1% 2.8% 1,584,245 NMF (281) (102,363) (502,922) 1,618 464,960 0.0% 3.4% 106,086 NMF (44) 15.9% 34,283 1,161,983 10.0% -11.0% 196,128 NMF 561,640 NMF NMF 10,934 NMF of the Group Total equity Total liabilities and equity Book value per share Total equity attributable to shareholders Non-controlling interests 1,790,369 2,420,602 -26.0% 1,662,800 7.7% 1,790,369 1,545,814 15.8% 1,662,800 7.7% 874,788 NMF 7,904 311,768 1,798,273 2,732,370 14,798,303 15,168,669 37.59 65.22 -97.5% 7,148 -34.2% 1,669,948 -2.4% 14,314,932 -42.4% 10.6% 7.7% 7,904 1,798,273 3.4% 6,888 1,552,702 14,798,303 12,907,678 14.8% 7,148 15.8% 1,669,948 10.6% 304,880 7.7% 1,179,668 14.6% 14,314,932 3.4% 2,763,913 NMF NMF NMF (502,922) 34.89 7.7% BANK OF GEORGIA 60#61BNB FINANCIAL HIGHLIGHTS INCOME STATEMENT, HIGHLIGHTS Change Change 4Q18 4Q17 3Q18 2018 2017 GEL thousands, unless otherwise stated y-o-y 9-0-9 Change y-o-y Net interest income 6,471 6,021 7.5% 6,525 -0.8% Net fee and commission income 1,356 2,421 -44.0% 1,669 -18.8% 25,894 7,805 29,397 -11.9% 9,336 -16.4% Net foreign currency gain 5,261 3,457 52.2% 3,885 35.4% 16,605 10,852 53.0% Net other income 332 1,295 -74.4% 105 NMF Revenue 13,420 13,194 1.7% 12,184 10.1% Operating expenses (8,785) (8,185) 7.3% (7,571) 16.0% 746 51,050 (32,261) (29,665) 1,773 51,358 -57.9% -0.6% 8.8% Operating income before cost of risk 4,635 5,009 -7.5% 4,613 0.5% 18,789 21,693 -13.4% Cost of risk 670 (518) NMF (718) NMF (3,070) (9,092) -66.2% Net non-recurring items (8) (5) 60.0% NMF (716) (60) NMF Profit before income tax Income tax expense 5,297 4,486 18.1% 3,892 36.1% 15,003 12,541 19.6% Profit (1,162) 4,135 (875) 3,611 32.8% (885) 31.3% 14.5% 3,007 37.5% (3,546) (2,257) 57.1% 11,457 10,284 11.4% BALANCE SHEET, HIGHLIGHTS GEL thousands, unless otherwise stated Dec-18 Dec-17 Change y-o-y Change Sep-18 9-0-9 Cash and cash equivalents 110,340 104,309 5.8% 65,808 67.7% Amounts due from credit institutions 19,664 10,499 87.3% 11,469 71.5% Investment securities 67,734 73,415 -7.7% 109,798 -38.3% Loans to customers and finance lease receivables 432,657 399,516 8.3% 394,749 9.6% Other assets 50,155 37,096 35.2% 42,038 19.3% Total assets 680,550 624,835 Client deposits and notes Amounts due to credit institutions Debt securities issued Other liabilities Total liabilities Total equity Total liabilities and equity 389,001 310,050 162,823 202,492 38,163 28,512 5,300 595,287 85,263 680,550 8.9% 623,862 25.5% 363,233 -19.6% 146,932 9.1% 7.1% 10.8% 33.8% 28,825 32.4% 4,261 545,315 79,520 624,835 24.4% 9.2% 4,433 19.6% 543,423 9.5% 7.2% 8.9% 80,439 6.0% 623,862 9.1% BANK OF GEORGIA 61#62BANKING BUSINESS KEY RATIOS 4Q18 4Q17 3Q18 2018 2017 Profitability ROAA, Annualised ** ROAE, Annualised ** RB ROAE ** CIB ROAE ** Net Interest Margin, Annualised RB NIM CIB NIM Loan Yield, Annualised RB Loan Yield CIB Loan Yield 3.2% 3.4% 3.2% 3.2% 3.2% 26.2% 27.8% 26.8% 26.1% 25.2% 27.3% 36.6% 30.9% 30.0% 31.6% 27.9% 18.1% 22.6% 22.6% 17.6% 6.0% 7.3% 6.4% 6.5% 7.3% 6.7% 8.4% 7.2% 7.5% 8.5% 3.2% 3.5% 3.4% 3.3% 3.4% 12.8% 14.3% 13.5% 13.5% 14.2% 14.2% 15.9% 14.8% 15.1% 16.1% 9.8% 11.2% 10.8% 10.2% 10.7% Liquid Assets Yield, Annualised 3.8% 3.4% 3.8% 3.8% 3.4% Cost of Funds, Annualised 5.0% 4.8% 5.0% 5.0% 4.7% Cost of Client Deposits and Notes, Annualised 3.4% 3.5% 3.6% 3.5% 3.5% RB Cost of Client Deposits and Notes 2.9% 2.8% 2.8% 2.9% 2.9% CIB Cost of Client Deposits and Notes 4.0% 4.0% 4.4% 4.1% 4.0% Cost of Amounts Due to Credit Institutions, Annualised 7.9% 6.5% 7.4% 7.3% 6.4% Cost of Debt Securities Issued 7.8% 7.8% 7.8% 7.8% 7.4% Operating Leverage, Y-O-Y 3.8% -2.9% 6.8% 2.9% -0.1% Operating Leverage, Q-O-Q -2.3% -0.2% 2.0% 0.0% 0.0% Efficiency Cost / Income RB Cost/Income CIB Cost/Income Liquidity NBG Liquidity Ratio 36.9% 38.3% 36.1% 36.7% 37.7% 36.7% 38.7% 36.3% 36.5% 38.3% 29.6% 31.0% 30.5% 30.9% 32.0% 31.9% 34.4% 32.5% 31.9% 34.4% Liquid Assets To Total Liabilities 34.9% 38.3% 37.1% 34.9% 38.3% Net Loans To Client Deposits and Notes 115.5% 109.4% 110.5% 115.5% 109.4% Net Loans To Client Deposits and Notes + DFIs 99.6% 92.4% 95.3% 99.6% Leverage (Times) 7.2 7.3 7.6 7.2 92.4% 7.3 Asset Quality: NPLs (in GEL) NPLs To Gross Loans To Clients 318,356 3.3% 301,268 312,203 NPL Coverage Ratio 90.5% 3.8% 92.7% 3.5% 318,356 3.3% 91.7% 90.5% 301,268 3.8% 92.7% NPL Coverage Ratio, Adjusted for discounted value of collateral 129.9% 130.6% 136.9% 129.9% 130.6% Cost of Credit Risk, Annualised 1.1% 2.1% 2.0% 1.6% 2.2% RB Cost of Credit Risk 1.7% 1.8% 2.4% 2.1% 2.5% CIB Cost of Credit Risk -0.2% 3.2% 1.5% 0.8% 1.5% Capital Adequacy: NBG (Basel III) Tier I Capital Adequacy Ratio 12.2% 12.4% 11.0% 12.2% 12.4% NBG (Basel III) Total Capital Adequacy Ratio 16.6% 17.9% 15.9% 16.6% 17.9% BANK OF GEORGIA *For the description of Key Ratios, refer to page 70 ** 2018 results adjusted for demerger related expenses and one-off impact of re-measurement of deferred tax balances 62 42#63KEY OPERATING DATA Dec-18 Dec-17 Sep-18 Selected Operating Data: Total Assets Per FTE 1,995 1,832 1,961 Number Of Active Branches, Of Which: 276 286 285 - Express Branches (including Metro) 165 156 169 - Bank of Georgia Branches 99 118 104 - Solo Lounges 12 12 12 Number Of ATMs 876 850 858 Number Of Cards Outstanding, Of Which: 2,177,273 2,227,000 2,192,870 - Debit cards 1,630,235 1,553,427 1,603,960 - Credit cards Number Of POS Terminals FX Rates: GEL/US$ exchange rate (period-end) 2.6766 2.5922 2.6151 GEL/GBP exchange rate (period-end) 3.3955 3.5005 3.4130 547,038 673,573 14,220 13,216 588,910 13,419 Dec-18 Dec-17 Sep-18 Full Time Employees, Group, Of Which: 7,416 7,045 7,300 - Full Time Employees, BOG Standalone 5,828 5,501 5,709 = Full Time Employees, BNB 669 702 705 - Full Time Employees, BB other 919 842 886 Shares Outstanding Ordinary Shares Treasury Shares Total Shares Outstanding BANK OF GEORGIA Dec-18 Dec-17 Sep-18 47,626,147 1,543,281 49,169,428 39,384,712 37,116,399 47,656,452 2,268,313 1,512,978 49,169,430 63#64EXPRESS BANKING 1 165 Express Branches Opening accounts and deposits Issuing loans and credit cards Credit card and loan repayments Cash deposit into accounts Money transfers Utility and other payments 914,613 Express Cards for Transport payments Metro Tbilisi www.TBILISI.Gove საქაF3DCოL განქ BANK OF GEORGIA EXPRESS) PAY Acts as payments card in metro, buses and mini-buses EXPRESS CARD 3 3,115 Express Pay Terminals 5488 VALID THRU EXPRESS PAY " ☐ Credit card repayments Loan repayments Cash deposit into accounts Loan activation Utility and other payments Mobile top-ups BANK OF GEORGIA MasterCard < 5583 DOMU AUGUN BANK OF GEORGIA 14,220 POS Terminals at 6,575 Merchants EXPRESS BUSINESS EXPRESS PAY MasterCard Payments via cards and points P2P transactions between merchant and supplier Credit limit with 0% interest rate 2 4 64#65EXPRESS- CAPTURING EMERGING MASS MARKET CUSTOMERS Number of Transactions '000s +9% 2016 2017 2018 +101% +43% -8% 117,519 108,240 104,022 62,110 -20% +26% 37,177 46,177 x5.9 39,200 +2% 34,016 30,898 16,756 12,307 45,443 38,810 26,101 31,812 22,990 20,729 15,676 13,368 6,349 6,415 5,798 5,892 2,649 Tellers Mobile banking Internet banking Express cards POS terminals ATMs Express branches Express Pay terminals BANK OF GEORGIA 449 EXPRESSO EXPRES 65 55#66SOLO A FUNDAMENTALLY DIFFERENT APPROACH TO PREMIUM BANKING - The target of 40,000 Solo clients (currently 44,292) already achieved ahead of time. We target growth through increasing engagement of existing clients and maximising the Profit per client and Product per client measures. SOLO Lounges BANK OF GEORGIA SOLO New Solo offers: ⚫ Tailor made • ° • banking solutions New financial products such as bonds Concierge-style environment Access to exclusive products and events Lifestyle opportunities SOLO SOLO Solo Club Launched in 2Q17, a membership group within Solo, which offers exclusive access to Solo products and offers ahead of other Solo clients, continues to increase its client base. At 31 December 2018, Solo Club had 3,825 members, up 7.7% q-o-q 66#67ნინო მარგველაშვილი როგორ შევაქოთ და გავამხნევოთ ბავშვები BANK OF GEORGIA HEALTH SOLO - EDUCATION, TRAVEL, HEALTH, ENTERTAINMENT #SOLOtalks YOGA - Captain Central Second ie® SOLO PROFESSIONAL ROBOTICS: LEADING MORE PRODUCTIVE TOMORROW NOVEMBER 1 BUSINESS SCHOOL 20:00 SOLO unu #SOLOboutique #SOLOrider BOT BAT e SOLO 26 036060 სOECD ჩეRილიპს საწმერტო დარბაზი ხატია გუნიათიშვილი STEINWAY & SONS 67 SOLO ELTON JOHN AND HIS BAND WONDERFUL CRAZY NIGHT TOUR#68RETAIL BANKING - CLIENT-CENTRIC MODEL As of 31 December 2018, we have 76 branches operating on our client-centric model BANK OF GEORGIA STOGE გაიგ 8500 68#69LOYALTY PROGRAMME Relationship brings a PLUS " ◉ Status levels can be achieved by using multiple banking products Points are collected through different interactions with the bank საქართველოს განპი Status level qualifies clients for exclusive benefits Points can be easily redeemed for specific rewards Programme members Programme partners Social campaigns per month 1.4mln 140 7 Active Transactions special with offers Plus points 399 144k BANK OF GEORGIA საქართველოს ბანკი EXPRESS DEBIT PLUS CLASSIC საქართველოს განპი MR. PLUS GOLD VALID 00/ 54 MOS საქართველოს ბანკი PLUS SILVER MR. Cardholder VALID THRU 00/00 5412 5993 4771 2598 mastercard. 69#70NOTES TO KEY RATIOS Return on average total assets (ROAA) equals Banking Business Profit for the period divided by monthly average total assets for the same period; Return on average total equity (ROAE) equals Banking Business Profit for the period attributable to shareholders of the Group divided by monthly average equity attributable to shareholders of the Group for the same period; Net Interest Margin equals Net Banking Interest Income for the period divided by monthly Average Interest Earning Assets Excluding Cash for the same period; Interest Earning Assets Excluding Cash comprise: Amounts Due From Credit Institutions, Investment Securities (but excluding corporate shares) and net Loans To Customers And Finance Lease Receivables; Loan Yield equals Banking Interest Income From Loans To Customers And Finance Lease Receivables divided by monthly Average Gross Loans To Customers And Finance Lease Receivables; Cost of Funds equals Banking interest expense of the period divided by monthly average interest bearing liabilities; interest bearing liabilities include: amounts due to credit institutions, client deposits and notes and debt securities issued; Operating Leverage equals percentage change in revenue less percentage change in operating expenses; Cost / Income Ratio equals operating expenses divided by revenue; NBG liquidity ratio equals daily average liquid assets (as defined by NBG) during the months divided by daily average liabilities (as defined by NBG) during the months; Liquid assets include: cash and cash equivalents, amounts due from credit institutions and investment securities; Liquidity Coverage Ratio equals high quality liquid assets (as defined by NBG) divided by net cash outflow over the next 30 days (as defined by NBG); Leverage (Times) equals total liabilities divided by total equity; NPL Coverage Ratio equals allowance for impairment of loans and finance lease receivables divided by NPLs; NPL Coverage Ratio adjusted for discounted value of collateral equals allowance for impairment of loans and finance lease receivables divided by NPLs (discounted value of collateral is added back to allowance for impairment); Cost of Credit Risk equals expected loss/impairment charge for loans to customers and finance lease receivables for the period divided by monthly average gross loans to customers and finance lease receivables over the same period; NBG (Basel III) Tier I Capital Adequacy ratio equals Tier I Capital divided by total risk weighted assets, both calculated in accordance with the requirements of the National Bank of Georgia instructions; NBG (Basel III) Total Capital Adequacy ratio equals total regulatory capital divided by total risk weighted assets, both calculated in accordance with the requirements of the National Bank of Georgia instructions; NMF - Not meaningful BANK OF GEORGIA 70#71COMPANY INFORMATION BANK OF GEORGIA Registered Address 84 Brook Street London W1K 5EH United Kingdom Registered under number 10917019 in England and Wales Secretary Link Company Matters Limited 65 Gresham Street London EC2V 7NQ United Kingdom Stock Listing London Stock Exchange PLC's Main Market for listed securities Ticker: "BGEO.LN" Contact Information Bank of Georgia Group PLC Investor Relations Telephone: +44 (0) 203 178 4052; +995 322 444444 (9282) E-mail: [email protected] www.bankofgeorgiagroup.com Auditors Ernst & Young LLP 25 Churchill Place Canary Wharf London E14 5EY United Kingdom Registrar Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS13 8AE United Kingdom Please note that Investor Centre is a free, secure online service run by our Registrar, Computershare, giving you convenient access to information on your shareholdings. Investor Centre Web Address - www.investorcentre.co.uk Investor Centre Shareholder Helpline - +44 (0)370 873 5866 Share price information Shareholders can access both the latest and historical prices via the website, www.bankofgeorgiagroup.com 71#72Empty